The ‘boom’ experienced by digital-based services and ecosystems due to the pandemic, which has accelerated adoption amid the need to share bank account data, is likely to continue according to CRIF managing director Sara Costantini.
This partly a result of the disruption from the past 18 months, with many market participants being forced to consider how Open Banking for the first time.
Critics may dismiss this as a short term trend, but on the latest episode of the Open Banking Expo Unplugged Podcast Costantini explained how there is a strong argument 2021 is a watershed year of change.
“The boom will continue,” Costantini told Open Baking Expo’s head of content Ellie Duncan. “I think there are some elements around the market that will increasingly facilitate that, especially as the guaranteed government loans and other stimulus will end and we will come back to what she defines as a “new” normality.
“Also, these past few months have helped us to create trust. This is a key element to make sure the usage around Open Banking can continue to steadily grow.”
For Costantini, the forced adoption during the pandemic has created an opportunity for the industry due to the greater awareness and understanding of Open Banking.
“From talking with customers over the past year, it is clear that Open Banking is being perceived as great value,” she said. “Sometimes this is perceived as even more valuable than credit bureau reports because the information they get with Open Banking is even fresher and newer.
“The customers are so interested in this, the questions we get is about how they can use the technology is new and interesting ways.”
Faced with this opportunity, there is scope for the Open Banking industry to build on the past few months and become increasingly adopted across new segments.
Open Banking has already been able to demonstrate its usefulness, but its long-term success will depend the strength and quality of its data. Costantini explained how the right data, structured and un-structured, could become the foundation of long-term relationships being created.
“They key to this success is the ability to turn data into gold,” she explained. “We need to be able to structure data in a readable and human format.
“This is possible with the use of AI, machine learning techniques and strong analytics that will make sure we can create the best outcomes from this data. Of course, the value of the data increases with the amount of it we have. Quality is linked to this as well. A customer data-driven approach will be crucial to developing valuable and long term customer relationships involving the whole financial service industry and create new collaborative ecosystems, for example between banks and insurance companies.”
Ultimately, greater use of data could not only help financial institutions better service customer relationships but could be used to predict their needs and wants. This could help add another layer of value to such a relationship, creating new revenue streams.
To listen in more detail to what Sara has to say then you can stream her recent podcast with Open Banking Expo here.