Who has adopted the right Open Banking approach?

17 Sep 2018

Britain’s high street banks have taken very different pathways in embracing Open Banking. While some have partnered and innovated from day one, others are still cautious. So, which approach is likely to pay off in the long-term? Expo asks Olly Betts, CEO of Openwrks…



  1. Which areas of the industry have seen the greatest amount of change from Open Banking?

In the past couple of years, there has been a lot of talk about how Open Banking and the technology behind it, mightchange financial services. Now, we are starting to see that because bank APIs are live and available. We are also learning what is possible, the time horizon and who is going to be driving the change.

The first area of change is in, and around, consumer banking. Are people going to change the way that they bank?  What is that going to look like? We are seeing a few different models for that. There are new banking propositions, with challenger banks or neobanks providing a different banking experience and the incumbent banks responding.

There is a third category where the transactional layer remains with the bank and a customer engagement layer is being offered on top, to give us greater insights into our banking and allow us to do cooler stuff on top of our bank account.


  1. Which do you believe will be the winning model?

The winning model is probably a combination. I can’t see people suddenly changing the designation for where they put their money. Some of the digital challenger banks have been struggling to get any customers to pay their salary in to those accounts. I’m not seeing anything there that will affect the behaviour of where people are putting their money.


  1. Are there any challengers which you have embraced on a personal level?

I am a very avid user of Revolut because it gives me a monetary benefit. It means I don’t have to pay exchange rate fees when I’m abroad. Do I like the interface? Well, that is kind of a hygiene factor that keeps me engaged, but the reason I use it is because it saves me money on forex. There are others in the market that don’t make me any money or save me any money.


  1. How do you assess who will be future winners and losers in the market?

I look at how the market will change in terms of the segments of the population that are likely to adopt the products. If you look at most innovation technology, they follow the typical adoption curve. There are early adopters that have a certain amount of affluence are tech savvy and perhaps behave like a millennial in terms of how they engage with technology.

Then, there is the broader adoption in the rest of the market. The wealth, affluent or rich base their buying decision on financial return, whereas with the poorer elements of society, it is all about access. To get true adoption of these products, you need to do both.


  1. How nimble, able, or willing are the incumbent banks to respond to a threat from challengers?

One of the challenges that any new start up trying to disrupt the market is that whenever there is technical disruption, there is a chance for the incumbents to take advantage of that too.


  1. How willing are the incumbents to work with newer companies and are the incumbents taking different views on the future?

With Open Banking, there is definitely a divide between those incumbents that see open banking as an opportunity or a threat. There are some banks that have invested heavily in marketing and are already advertising on television. Brands like HSBC and Lloyds have declared a massive investment. Then, you see other banks which are conspicuous in their absence. They perhaps see it as a fad, as a threat or even a combination of both. Banks are under pressure to manage their public image and key to them is brand perception.


  1. Is there any benefit in waiting or is it all about first mover advantage?

You have to move first, especially in markets like this. We implemented the Open Banking APIs from day one. We learnt so much from being there first. What the neobanks are doing quite well is taking risks and innovating early. Their customers are happy to forgive them for their mistakes because they have great customer service. They have over invested heavily in customer service.


  1. Surely there are risks of jumping in early though?

Banks that are there now and are learning through it will be in a much better position. That said, industry commentators have warned that Open Banking will eventually see a major data breach with someone. Do you want to be the party involved in that? Well, no. But if you have already established a great engagement model with your customers, you will be forgiven for innovating.


  1. You’ve mentioned customer service a lot. Is this the key to the Open Banking future?

One of the extensions of open banking is that it has become all about customer service. Business banking is an interesting area. RBS has public stated they are investing more than they ever had before in customer facing staff. But you have to ask how do you blend that with the right technology?