Intel Report Core Replacement - Flipbook - Page 13
Developing The Business Case for Open Banking
A survey of global banking customers by alternative core solution
Mambu found that 60% don’t like the idea of open banking. At the
same time, 80% of the respondents use a financial app. And according to a survey by banking engagement platform CREALOGIX AG,
access to instant transfers between accounts, the ability to see every
account in one dashboard and the chance to automatically calculate
Open banking defined: Also known
spending patterns were the top three services sought. Customers
as open architecture, it’s the concept
want open banking capabilities even if they don’t realize what the
of allowing a customer easy access to
term means.
their data. In practice, it uses APIs
There are three requirements for the open banking trend to continue
forward. The first, regulation. Countries must have rules in place
that allow for banks to incorporate open banking tools without running afoul of the law or compliance. Innovation and the rise of fintechs provide the second step to mass open banking use. In the U.S.,
in particular, the rate of innovation from fintechs has driven much of
the initial open banking shift. The third: consumer buy-in. The more
that customers demand these services, the more likely that banks
as a bridge to third-party financial
technology companies that offer
services that the bank may not be able
to provide on its own. This can include
giving consumers a full picture of
their finances or providing them with
advice based on predictions from their
spending.
will begin to incorporate more options. That has occurred, even if
customers don’t realize it yet.
Beyond customer preferences, the bank itself gains advantages from
having the data in a more centralized, easier to access format. It can
take advantage of data analytics, AI tools and machine learning to
better understand where new opportunities reside and better ways to
approach the business.
How this access to insights plays out in the real world depends on
the bank. For instance, a bank that focuses on mortgages can use
data analytics to determine which buyers might soon look for their
next home, or which buyer might soon look for a vacation home. A
lot of banks want to access the data, says Giovanni Mastronardi,
group president of enterprise banking at core provider CSI. But you
don’t “see a lot monetizing of data.”
CORE REPLACEMENT: HOW BANKS ARE REPLACING THEIR CORES | 11