Open Banking: Innovating for customers

Open Banking is all about the customers and what they want, so banks have to be more customer-centric than ever before. Open Banking reforms around the world have brought major shifts in the banking industry and how customers are served. With customers taking control of their data and deciding what to share, it’s an opportunity for banks to evaluate their business models and explore greater collaboration between banks, fintechs and corporations to deliver relevant financial services to their customers. At the same time, the exchange of customer data has generated an increased focus on privacy. How will all these converge in the true spirit of Open Banking?

These were some of the key points from an Open Banking panel discussion organised by Standard Chartered recently in Bengaluru, home to the Bank’s global centres of excellence in specialised areas including data analytics, software development, anti-money laundering, financial crime surveillance and financial control.

At the event, the Bank’s business and technology leaders shared their views on the future of Open Banking and Standard Chartered’s initiatives to lead in this space. "Open Banking provides more options than we ever expected to provide to clients. It opens the door to innovation," said Amit Arora, Global Head, Digital Programmes & Regional Head, Digital Banking, ASEAN and South Asia. In retail banking, for example, Standard Chartered is strategically realigning its business according to customer journeys so whatever products and services it develops is based on what customers need. The potential to develop better and more customer-relevant products and services is enormous. “We already have a base platform and initiatives ready, what's holding us back is our imagination,” he said.

Yet in a world where customers have multiple choices at their fingertips, they may not necessarily know what they want. Martijn De Jong, Global Head of Digital, Data and Platforms was of the view that successful innovation requires banks to fully understand customer issues at every stage of their financial lifecycle before deriving the right solutions. "Henry Ford said that if he had asked people what they wanted, they would have said faster horses. This is what led to experimentation," he said. Through deep customer insights, banks can anticipate needs and respond quickly to changing customer demands. Banks need to figure out how many solutions they are going to create, how many do customers actually want, and how much do customers want to pay for them.

Open Banking is also blurring the lines between banks and third parties. But what’s clear is that data sharing has generated a renewed focus on privacy. “Data is very powerful, and we can help companies to run their business better with that. But as guardians of data, we have a very high responsibility to play back the data to the customer, only with their consent,” said De Jong.

The crucial interaction between technology and banking means that Open Banking creates new opportunities for banks to reshape their business models to be adaptable, innovative and focus on creating value to remain top-of-mind among consumers, said Dr. Sebastian Wedeniwski, the Bank’s Chief Technology Strategist. Standard Chartered is boosting its Open Banking capabilities by launching an aXess developer platform which will host the bank’s Application Programming Interfaces (APIs), applications and libraries, serving as an adaptive layer in its technology architecture to drive more connectivity and partnerships/co-creation between developers, corporations and fintechs. It has also established aXess Labs for experimenting with emerging technologies and aXess Academy to upskill developer talents.

“The future of banking is changing fast with massive technology-led innovations. Our aXess initiatives to boost our Open Banking capabilities aims to enhance the developer experience and upskill the technology expertise of the Bank, while guiding developers on our journey to build for openness and integration,” he added.

Wedeniwski explained that aXess Labs and aXess Academy were established in Bengaluru since the city houses the Bank’s global centres of excellence and offers the added advantage of proximity to Asian markets. “What we build in Bengaluru can quickly be scaled to our markets in Asia”, he added. Its proximity to Asia also means that there is more potential to test use cases which can be quickly applied in the region.

Close partnerships and co-location between technology and business teams is essential for success. According to Arora, "If technology teams understand real clients and business, that’s success. Tech teams need to visit sales sites, meet customers and experience the product they build. It changes the way they innovate and deliver.” He said, “Technology is doing fantastic things behind the core banking system. We have top-class capabilities that can be launched in the market."

Watch this video to find out more about Open Banking and how it can better the experience for customers.