Open banking is set to send shockwaves through the UK’s banking industry in 2018. Consisting of the CMA’s open banking remedy and PSD2, the initiative will make it possible for financial institutions to share financial transactional data with third parties online, with the aim of improving people’s banking experience.
Banking across the globe has been going through a major transformation over the last few years, and this evolution looks set to continue well into 2018, and indeed beyond.
Access to cash is a staple requirement for the on-demand generation of consumers. Cash is still relied upon as a payment option and as such the general public want to be safe in the knowledge that they are never too far away from access to our favoured notes.
The so-called ‘generation gap’, even 30 years ago, used to be measured in the latest fashion and music crazes which would often pass as quickly as they arrived on the scene.
It’s not news that the majority of retail-bank managers in Europe are concerned about the territory being lost to “the enemy”, those clever, customer-pleasing fintech companies. Fortunately, the end is not in sight for forward-thinking traditional banks that not only make the most of their formidable advantages and resources but also turn enemy into partner through coopetition.
You would have to be living with your head buried in the sand not to realize that we are witnessing the Fourth Industrial Revolution, of which the Blockchain Revolution is an integral part. The necessity of working with digital assets is forcing the reinvention of traditional financial infrastructure, and only those banks that adapt and participate in the metamorphosis are sure to capitalize on the generous rewards.
Banks make a big mistake when they leave the customer out of the fraud equation; prompt communication with a client when a suspicious transaction is detected can result in much swifter resolution of the issue as well as better relations with the customer. After all, banks and their customers are on the same page when it comes to thwarting financial fraudsters.
Blockchain, the decentralized ledger that supports today’s burgeoning cryptocurrencies, has become so useful that it can no longer be ignored by today’s financial institutions. From cutting costs to reducing risks, this indomitable digital technology has moved way beyond bitcoin to becoming an indispensable ally to the bank that wants to most securely and efficiently fulfill its role of tracking, storing and transferring value.
Blockchain is moving beyond cryptocurrency exchange into the world’s most progressive stock exchanges, which are optimistic about the technology’s potential to cut cost, enhance speed and reduce risk. Before it revolutionizes stock markets as we know them, the decentralized digital-ledger technology faces a few obstacles, such as scalability and regulation, but those in the know are barely able to contain their excitement about its prospects.
API-based Open Banking, a financial technology born in Europe to achieve enhanced transparency, is among the latest banktech innovations that seem intent on shaking legacy banking systems to their core. The good news is that both customers and their banks alike stand to gain from the more competitive environment and stricter data processing that will result from its widespread adoption.