The battle is on: banks are searching for ways to sustain their revenue streams during an emergence of potentially more innovative entrants. The repercussions are widespread, reaching as far as here in Scandinavia.
The Nordic region is experiencing a dramatic change in how banks perceive transparency. The traditional players are now ensuring customer experience is at the forefront of their mission statements, particularly as regulations such as PSD2 are entering center-stage.
Attitudes also have changed despite the legal framework having yet to be published in Norway.
In terms of customer experience, it is clear that data protection regulation has been the extra boost needed to start focusing on the importance of adopting new technologies; banks are looking for opportunities to learn from smaller banks or challenger banks
as to how to implement Open Banking in such a context. This is a good signal - the aforementioned “battle” could instead manifest itself as a potential for mutual growth and healthy competition.
For that to happen, however, banks would benefit from reconsidering their strategies around customer experience and methods of communication towards consumers; the majority of customers are not fully aware of the impacts of PSD2 or the ins and outs of GDPR.
Traditionally banks have shied away from sharing client information; a necessary precaution to prevent customer-poaching from competitors promising improved, cheaper and more efficient products and services. This passive approach meant that only alternative
for customers wishing to improve their financial overview was to actively search and retrieve for themselves - potentially elsewhere - rather than banks making the first move to transform and innovate their products.
The tides are changing. Banks are beginning to understand that transparency, efficiency and security will radically change the customer experience and journey. This is an act of courage, and not fear - a fuel for customer-centric innovation. When banks are
honest about how much they are charging and why, and what data they have and how they use it, they can really fill in the gap in customer expectations and truly support the client based on mutual trust.
I am certain this flow of transparent communication will prove to be of mutual benefit to both customers and financial providers over time. Finding a fine balance between customer experience and security will also become a critical topic in the next two
months with the final RTS deadline approaching soon.
Open Banking itself is not a recipe for success, but with transparency and enriched customer experience, incumbents have better possibility to thrive on the battlefield. We must redefine what “Open” truly means in the current equation and to whom it should
matter the most.