One year on: Open Banking
Open Banking turned one on Sunday, but why has no-one made a big deal about it despite all the potential?
It’s been a relatively quiet first year for Open Banking. But that shouldn’t be a surprise to anyone who’s been paying attention. Despite the great potential of Open Banking and the never-ending stream of thought pieces, blogs, books and podcasts on the topic don’t seem to have made any earth-shattering movements.
That’s okay. Transitions like this shouldn’t be about one sudden huge push and although it’s a bit disappointing to some, it shows that incumbents are learning to walk before they run. To commemorate the anniversary, I’ve pulled together some of the best bits of pieces we’ve done on Open Banking so far.
Is it just another regulation?
Open Banking’s had underwhelming implementation over the past year. Unfortunately, with a mandated deadline, banks tend to default to a ‘compliance endeavour’, losing sight of the potential advantages and opportunities being afforded by such a significant change. It’s a poor reason when there’s so much more to be done with the power of APIs.
Monzo’s not a bank with an API, Monzo is an API
Simon Vans-Colina, Engineer at Monzo
Discover the usefulness of APIs in our piece on why Open Banking can be about more than PSD2.
APIs build ecosystems
At 11:FS we speak a lot about getting out of the way of a customer’s journey. Modern banking is about facilitating customer purchases. That’s most easily done by providing as few steps as possible to complete a transaction. Open Banking actively encourages creating a financial ecosystem for customers where they can use banking services seamlessly.
APIs are key to creating a digital ecosystem for customers. In an increasingly digital world, it’s time to bring seamless experiences to personal banking
Find out more about seamless transactions and developing an API ecosystem.
Incumbent banks just about met most of the deadlines for the release in January 2018, but it’s the untapped potential of the regulation that’s grabbed the most attention from the world. Countries usually at the forefront of technological innovation are paying close attention. More versions of Open Banking are popping up across the world all the time, even though nothing significant has hit the market yet. But it will. And when it does the entire world will be paying close attention.
Propositions that will cement the results of Open Banking into the conscious of customers. That’s the holy grail.
Adam Davis, Head of Delivery at 11:FS
Get to grips with why the eyes of the world are keeping a close eye on implementation with our piece on why the world is turning to Open Banking.
Strength to strength
Despite the lack of impact, plenty has been happening behind the scenes. There are two main strands to Open Banking. The information gathered from the Account Information Services (AIS) space and third parties generating payments from customer accounts on their behalf. It means a new type of payment is on the horizon for PISPs. Account to account (A2A) payments, which for now is still uncommon knowledge.
Don’t bet against merchants and big businesses pushing the Open Banking payment bandwagon
Adam Davis and Toby Whitlock
Read up on the second strand of Open Banking and just why card payments are under threat.
All of the functionality made possible by Open Banking is under threat. Not from external sources or an unwillingness to engage with the possibilities. It’s threatened by the legacy systems of banks. Banks are built on systems that are out of date, systems that can’t be extended out with APIs without causing problems.
The world’s moved on and bank infrastructures are failing to move with it
Discover how to get around these legacy problems and why pretending they don’t exist will create a veritable Bankenstein’s Monster.
For anyone still confused
If you’re still finding Open Banking to be a bit of a pain or difficult to get your head around it then don’t worry. You’re not alone. It’s a complicated issue and it’s hard to know where to start.
We’ve put together a great beginner’s guide to Open Banking to fill in any gaps.
So, that's where Open Banking is one year after launch. It's not had the biggest impact on the industry just yet, but there's plenty of room for improvement. And with all the work ticking along in the background it's only a matter of time until there are some groundbreaking results.