Open Banking, which allows third parties to build applications around the activities of established banks, is curtailing the way banks have always functioned. The tried-and-true vertical-integration model, through which a bank maintains a firm grip on all of its operations, is being replaced by a more cooperative approach. How will innovative banks fulfill their roles as suppliers, producers and retailers of financial products and services in the Open Banking era?
The Second Payment Services Directive, which transfers control of data from banks to customers, has created difficult questions that affected banks operating in Europe must answer if they want to maintain their competitive edge and hold onto their customers in an increasingly crowded financial marketplace. Fortunately ground-breaking cross-selling and loyalty programs allow banks to compete and win against shrewd third parties.