The transformation of the banking sector continues. Open banking data, instant or invisible finance, market consolidation... Open Banking promises many technological advances.
With the entry into force of the second European Payment Services Directive (PSD2), banks are obliged to make their customer data available to third-party players such as account aggregators. What are the challenges of Open Banking?
Secure data sharing
Open Banking is based on opening up bank information systems and sharing customer data via an API. This programming interface enables industry players to connect to bank services and offer their own applications. For consumers, this concept opens up vast prospects: simplified online shopping, personalized discount coupons, tailored wealth advice... all actions that can be carried out in a matter of seconds from their cell phone.
This technology requires these players to obtain the consent of their customers. On this point, the General Data Protection Regulation (GDPR) is clear: banks' transparency on commercial transactions (deposits, transfers and other routine operations) carried out with customer data must be total. The use of this data therefore presupposes the customer's prior consent.
While the use of APIs is nothing new for American web giants such as Google and Facebook, the entry into force of PSD2 should make this practice more widespread. Users will then have access to personalized financial services without having to make the slightest effort.
Promising developments
Open Banking should encourage the emergence of innovative financial services. Some banks have already adopted this technology. BNP Paribas, for example, has developed a B2B marketplace called Kintessia. It enables customers of BNP Paribas Leasing Solutions to rent professional equipment for agriculture, construction and transport.
For its part, Groupe BPCE launched a platform in June 2018 to offer third parties the opportunity to distribute its banking products and services. Finally, since 2016, Crédit du Nord has been developing the "Synthèse Multibanque" service, enabling the aggregation of accounts opened at other banks in the customer's personal space.
A boon for fintechs
In an Open Banking environment, banking institutions must necessarily realize that they will need to open partnerships with fintechs both to reinforce their transparency and to stand out from their competitors. Open Banking platform Tink recently announced its arrival in France. Created in 2012, it offers its partners (major banks, PSPs, startups) secure access to their customers' financial data. European leaders such as BNP Paribas Fortis, ABN Amro, NatWest and Paypal use its technology. Tink's main competitors, Bankin' and Lydia, are also trying to capitalize on the sector by developing applications to centralize customer banking data within a single interface.
Open Banking is therefore the best way for banks to meet new user needs. According to a study by Deloitte, 90% of banks plan to become Open Banks by 2021.