Everyone believes that open banking will come in – even big banks.
Competition from fintechs and tech giants will force big banks to embrace open banking.
A new survey by consultancy Accenture which polled payments executives at big banks found that even big banks believe open banking will soon be a reality. Banks will be forced by competition to embrace open banking or face "irrelevance", the survey found.
“Open Banking provides myriad opportunities for banks to generate new revenues and offer new products; however, it also puts banks at risk of becoming back-end, transactional players, with their products and brands buried deep in another transaction,” said Alan McIntyre, a senior managing director at Accenture.
Open banking allows customers to share their credit history – such as how much money they earn, whether they repay their debts, what assets they have, etc. – with other banks and finance businesses.
These other businesses can then use that history to give them a better deal, such as a lower interest rate on a home loan.
But how quickly executives thought open banking will get adopted differed heavily by region.
Nearly two-thirds of banks in North America thought quickly implementing open banking was critica, compared to half in Europe and two-fifths in Asia Pacific, the survey found.
More curiously, half the executives surveyed thought other big banks would twist their arms into adopting open banking - not just fintechs and tech companies.
“Banks across the globe are identifying opportunities to drive new revenue streams by offering services to third parties, such as consumer credit checks and identity management, enabled by Open Banking,” Mr McIntyre said.