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The status of Open Banking in Europe - From inside the bubble

I've just come back from the Open Banking and APIs Forum in Amsterdam arranged by Fleming. It is a small event, but still diverse in participants and speakers across incumbent banks, neo banks, intermediaries, infrastructure firms and even the EBA was represented.

My speaking slot "Add trading and investing to your core banking offering" took place towards the end of the  second, and last day, and to be honest, at that time I was actually starting to worry, if the audience would find my presentation really boring, What I was about to say was just a repeat of what had been said again and again the last two days..

A good part of my prepared talk centered around the topic I recently discussed in this article published on Finextra and our own website: "Open Banking is here to stay, how to make the most of it".

Everybody finally seem to have realized it..

One of the takeaways from my article was that incumbent banks really need to look beyond PSD2 and start exploring the full potential of Open Banking. Reflecting on the last two days in Amsterdam, one main takeaway from the conference is that everybody took this to be self-evident.

All the participating companies now have an Open Banking program, not driven by the need to achieve PSD2 compliance but with a wider scope and shaped for the pursuit of further opportunities. Many participants had or were in the process of creating market places, and several were actually offering "Banking as a Service", just like us in Saxo Bank.

This is of course what you would expect from well-known front runners like Fidor Bank, Starling Bank and Yolt. But the message was repeated by established players like Deutsche Bank, HSBC, BBVA, and Sparebank 1, just to name a few.Further, when the audience was polled why they were now embracing Open Banking, 46% named “New revenue sources” and 38% pointed to “Better customer experience”, and only 4% picked “No idea”. 

Company culture and DevOps

Another - to me - interesting observation was that many of the speakers dedicated a good portion of their presentation to talk about company culture and DevOps. Felim O'Donnell of Starling Bank reminded us of the agile manifesto, which I think is worth repeating:

”We value:

  • Individuals and interactions over processes and tools
  • Working software over comprehensive documentation
  • Customer collaboration over contract negotiations
  • Responding to change over following a plan”

Kristine Ursfjord from Sparebank 1 explained how they are now organized in 23 independent team delivering business functionality and APIs end-to-end. And Leon Muis explained how Yolt - 'of course' - is able to release a new version of their API within 30 minutes, if necessary. 

The importance of creating an ecosystem 

A third common thread was the repeated mention of the importance of creating an ecosystem. Tech firm n:dgit put it most bluntly. On a four step scale of evolution ladder they put the creation of an ecosystem at the top. And, of course, pursuing an Open Banking strategy, possibly powered by a technology like theirs could put "your bank" at the center of such a ecosystem. 

Others echoed the sentiment. Ecosystems were important and valuable to both the participants and the ecosystem sponsor. Participating startups can build upon a provided foundation and thus focus on their core. Ecosystem providers are able to offer more innovative services to their customers without having to make the full investment it would normally require to build it in-house.  

The tide has finally turned !

So,I leave the conference with a feeling that the tide has finally turned. Gone is the dismissal of Open Banking as the next fad, or something which can be delegated to priority 11 on any banks top 10 list. Emerged and fully accepted is the fact that Open Banking and modern principles for software development including agile and DevOps must be a concern at the C-level.

But I cannot help thinking: Have I just been in a bubble for the last two days? Where are you and your company on the Open Banking journey…, really?

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Benny Boye Johansen

Benny Boye Johansen

Head of OpenAPI

Saxo Bank

Member since

21 Jun 2017

Location

Copenhagen

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This post is from a series of posts in the group:

Open Banking

Open Banking regulation, innovation and technology and it's potential to revolutionise the Financial Services Industry.


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