The Hidden Backbone of Open Banking: Why Process Orchestration Is Essential for Innovation

Evolving customer and market demands are rapidly reshaping the financial services landscape, pushing institutions to transition from closed, product-focused systems to open, customer-centric platforms. Alongside market changes, regulations such as the UK’s Open Banking Implementation Entity (OBIE), the EU’s PSD2, and the US Consumer Financial Protection Bureau’s Rule 1033 are further encouraging banks to modernize legacy systems.

Open Banking is no longer seen as a compliance exercise, instead it represents a strategic opportunity to drive revenue growth, reach new customer segments, and build digital-first services tailored to user needs. Ultimately, there’s a huge potential for new revenue streams if banks successfully rewire their operations and embrace new business models.

This opportunity is already being pursued by leading players. Banks like Citigroup, HSBC, JP Morgan Chase, NatWest Group, and Royal Bank of Canada have embraced the shift, opening up to fintechs, non-banks, and cloud providers. With competitive differentiation in banking increasingly based on how well a provider integrates into customers’ lives and creates real-time value, Open Banking is key to enabling these opportunities.

However, the innovation journey is not straightforward. For many financial institutions, they still need to navigate legacy systems and fragmented infrastructures. While new APIs and third-party services dominate industry headlines, real success in Open Banking starts with something far less visible: process orchestration.

The Cost of Complexity

Banks may have invested in digital transformation for decades, but the result often remains a maze of disjointed internal systems and decoupled processes. Open banking has created a more interconnected financial system for both consumers and corporations, but at the same time  increased customer usage has placed increased strain on systems. Adding new APIs, external providers, and data-sharing obligations to already fragmented environments further burdens systems. Many incumbent banks still rely on monolithic or bespoke platforms that make visibility and change challenging at best due to the difficulty in integrating these systems with newer technologies, like AI or AI agents. 

There are four major obstacles banks typically face:

• Complex, opaque processes: Legacy systems often hide business logic in proprietary formats, making it difficult to optimise or automate workflows across front- and back-office functions.

• Integration challenges: Older platforms are frequently incompatible with modern APIs, and temporary fixes like Robotic Process Automation (RPA) are poorly suited to the real-time demands of Open Banking.

• Limited flexibility: Commercial off-the-shelf (COTS) applications can be quick to implement, but costly to customise and maintain. Over time, this adds to technical debt.

• Scalability and risk exposure: As volumes grow, systems must scale while maintaining compliance. Solutions that cannot integrate into a composable architecture may require more manual oversight and increase operational risk. 

In other words, financial institutions may find themselves locked into infrastructure that actively prevents them from delivering the seamless, secure, and scalable experiences Open Banking requires.

Why Orchestration Is the Missing Link

Process orchestration offers a way to unify fragmented systems, enabling banks to coordinate activity across legacy infrastructure, third-party APIs, internal departments, and emerging technologies including AI or whatever technology comes next. In an Open Banking context, this capability becomes essential.

But what does this look like in practice? Let’s imagine a small business owner approaches a traditional bank for a loan. The process is slow, manual, and dependent on repeated documentation and in-person appointments. In contrast, Open Banking enables seamless integration with accounting software, uses AI to assess applications in real time, and makes it easier to disburse funds in a matter of days), reducing delays  for both the business asking for a loan as well as the bank.

The rise of AI agents can also support this end-to-end process, from discussing loan options to completing KYC/AML checks and risk assessments. By offering a  24/7/365 digital workforce, the small business owner doesn’t have to wait and can keep their business growing. 

To make the most of Open Banking, financial services organisations need to focus on orchestrating multiple backend systems and checks: customer identity verification, risk assessment, credit bureau integration, fraud detection, and legal compliance, into one coherent, automated journey.

Beyond speed and efficiency, orchestration can help banks reach new markets. By tapping into alternative data and automating KYC/AML checks, banks can serve underbanked citizens that traditional credit models exclude. This is made possible by banks using Open Banking to access alternative data to conduct more accurate risk assessments for consumers who may be unable to demonstrate creditworthiness through traditional channels.

A Call for Strategic Orchestration

To compete effectively in an Open Banking landscape, banks need to see orchestration as more than a backend IT task and start treating it as a core strategic capability. Financial leaders already embracing this mindset are reaping the rewards. For example, Barclays expects to scale to tens of millions of process instances daily using process orchestration, thanks to building cloud-native architecture that provides elastic scalability and resilience.

These are not abstract ambitions for financial institutions, they’re measurable outcomes. Process orchestration can help pilot, prove, and scale innovations, creating reusable process components, aligning business and IT, and tracking performance through real-time dashboards.

Building for the future

By starting with small, well-scoped projects and building reusable process components, banks can rapidly pilot and scale Open Banking capabilities while maintaining governance and measuring results.

Open Banking represents one of the most significant opportunities for financial services in a generation. Reaping the benefits will require more than APIs and fintech partnerships. Instead, a new foundation of process orchestration is needed–one that enables rapid innovation without compromising control.

The institutions that succeed will be those that can integrate flexibly, operationalize AI, operate at scale, and adapt continuously. With the right orchestration strategy, banks can stop chasing innovation and start owning it.