Nearly half (45 per cent) of global banking executives are set on transforming their business models to become digital ecosystems, and almost a third (29 per cent) have strategies for open bank hub initiatives, according to new research by Temenos.
It comes as the firm published a new report – ‘Open banking: revolution or evolution?’ – written by the Economist Intelligence Unit (EIU) and based on a survey of over 300 global banking executives.
While banking data is beginning to flow, according to the report, the global revolution in open banking is a work in progress and customer experience and confidence are key to unlocking its true potential.
The pandemic has boosted open banking and the financial technology ecosystem. The report states that incumbent banks could be the biggest beneficiaries, provided they adopt adequate technology strategies to compete with nimble new entrants.
Kanika Hope, Chief Strategy Officer, Temenos, said: “Open banking is lowering barriers to entry and breaking the traditional banking value chain. It is forcing banks to rethink their business models and decide whether they want to be manufacturers or distributors of financial products or both.
“Temenos’ modern, API-first, cloud-native banking platform allows banks to pursue all options, allowing them to offer rich customer experiences as well as to drive back-office automation and bring products to market faster, leveraging their own capability as well as that of their open banking eco-system of partners through open APIs.”
The report detailed that open banking could benefit banks by boosting efficiency in the way they leverage their own data internally for better service personalisation, a top priority for nearly a third (32 per cent) of respondents in the EIU survey.
John Broxis, Managing Director, Open Banking Europe, added on the report: “Opening up banking isn’t enough unless you can prove to your customer base the certainty of how their data is going to be treated, certainty about refund periods and reconciliation information, or certainty about what happens if you do something wrong.”