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Open Banking: How Data Driven Innovation Can Positively Impact Customers Lives

As open banking makes its way around the world, the US is in a unique position to explore the opportunities, while at the same time, learning from other markets that have moved faster and with different regulatory approaches.

Much of the progress in the open banking arena has been around how financial institutions can benefit through interoperability of APIs and standardization of who can access people's financial data. What has been missing from the conversation is how people can move their financial lives forward through more data driven innovation.

This is the WHY that, as an industry, we should be focused on.

First, take a step back. When you think of all of the investment that has gone into data innovation over the years – who were the beneficiaries? The business units that optimized segmentation and cross sales? The product developers who were able to save money or increase revenue through better digital engagement? The data brokers and hedge funds who sold and resold data and insights?

When the outcomes of data innovation are only the top and bottom line of companies, the bigger picture is being missed. Open banking presents a great opportunity to segue to a win-win scenario with benefits far beyond interoperability and risk reduction.

So, what are a few win-win outcomes of open banking?

For customers:

  • Increased privacy, security & controls through permissioned sharing
  • Interoperability means more consistency with consolidated views of accounts
  • Streamlined processes such as loan applications
  • Increased ability to assess competitive offers

For institutions:

  • Reducing risk through increasing security and privacy.
  • Consistency across the omni channel experience
  • Increase ability to engage with hyper targeted advice and offers
  • Ability to offer value add services to engage and retain customers

For fintechs:

  • New engagement models with non-PII data
  • Increased opportunities for data services
  • More predictable data availability

The end goal of open banking should not be to check regulatory boxes, or control data ownership – but to take advantage of the new landscape to truly engage customers with data driven innovation.

It’s not often the financial services industry gets an opportunity to reinvent customer engagement. And institutions and companies that are early to adopt a win-win mindset that improve financial outcomes for customers as well as meet internal goals, will be the ones who win in the years to come.

Join Jane Barratt, Chief Advocacy Officer at MX, at our upcoming webinar to dive into these topics and more on 8/28 at 11ET. Sign up here.

Digital Experience Group - Jane Barratt MX 
Wed, Aug 28, 2019 11:00 AM - 1:00 PM EDT 

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