Open Banking, which comes into place January 2018, is a landmark development for the banking industry.
It will force banks to open up their Advanced Programming Interface (API).
This may sound like a dry compliance point, but the reality is far from it. With customer permission, competitors will be able to access banks’ enormous – practically unused – data repositories.
Working with Callcredit, the consumer data company, we conducted in-depth research into how the sector is approaching the regulation.
We found a mix of hungry challenger banks and new competitors, eyeing up a complacent banking establishment.
Banks, for now, are protected. Their data is creaking, complex, and largely unusable due to universally unwieldy technology. No big bank is doing much with big data, meaning that the entire banking establishment has been able to rest easy.
Thanks to Open Banking, new competitors will pose a greater threat. Often born online, brimming with fresh talent and with systems that were built last year and not last century, these competitors will be able to make the data sweat.
They will use it to build and launch new, customer insight-led services that will tear away at the money-making parts of banks.