The Paypers discussed with top influencers within the financial industry to discover the trends of Open Banking and Open Finance for 2023 and 2024.
Before starting the work for the report you are currently reading, I engaged in conversation with some of the most relevant influencers in the financial industry, seeking their perspectives on the current trends in Open Banking and Open Finance. They provided a compelling glimpse into the evolving landscape that is reshaping the way we interact with financial services.
Initiating the conversation, Alex Johnson asserted that Open Banking is heralding a future where severing ties with your bank becomes effortless. Johnson contends that contemporary banks often take their loyal customers for granted. In a world where consumers and businesses can swiftly shift deposits or refinance loans with a simple push of a button, the current complacency is no longer sustainable.
Anna Maj focused on the transformative power of payments in fueling the adoption of Open Banking. She noted that the journey commenced with account information and is now propelled by Account-to-Account (A2A) payments, gaining momentum online. The new frontier, according to Maj, is cross-border payments, showcasing the expanding horizons of Open Banking.
Brenton Charnley highlighted the pivotal role of Open Banking in transforming consumer interactions with financial services. Emphasizing the significance of a secure and safe environment for leveraging financial data, Charnley cited Australia's progress in establishing a world-leading Consumer Data Right as evidence of the ongoing transition to an Open Data Economy.
Bruno Diniz observed the maturation of Open Finance globally. Beyond operational improvements like higher limits and lower fees, Diniz pointed out that Open Finance is evolving into a tool that reshapes the financial experience. He highlighted the offering of tailored interfaces, contextual offers, and data-driven non-financial solutions for daily consumer needs as evidence of this evolution.
Efi Pylarinou emphasized the role of openness in solving complex cash management problems for businesses. Pylarinou asserted that openness is crucial for providing businesses with nearly real-time access to credit while effectively managing risks. Furthermore, Pylarinou highlighted the core role of openness in designing an AI financial advisor for retail.
Turning our attention to Brazil, Gabriel Pereira revealed how Open Finance is differentiating players in the country, particularly in the realm of credit. Pereira noted that various credit product journeys now incorporate Open Finance features, improving offers by reducing fees and rates. This trend is evident in credit cards, personal loans, credit portability, and other loan options, with a focus on real-time personalisation and easy information access.
Heather Xiao emphasized the growing power of Open Banking as a tool to solve real-life problems for individuals and businesses. She highlighted the role of Open Finance and smart data in leveraging new datasets, delivering innovative propositions, and streamlining data across businesses and sectors in customer journeys.
Marie Walker, Open Futurist at Raidiam, discussed the global momentum building not only among regulators but also among consortia and enterprises. She highlighted the exploration of cross-border and multi-sector solutions by companies aiming to deliver what people truly desire. There is a growing realisation and success in delivering self-financing ecosystems.
In the United States, Mary Wisniewski acknowledged the historical reliance on screen scraping for data acquisition by fintech and bank apps. With the shift towards an API model, the aim of Open Banking is to offer consumers improved reliability when using money apps. The focus is on improving usability with high stakes attached to its success.
Nicolas Pinto discussed the transition from Open Banking to Open Finance and the emergence of ecosystem offers. He highlighted how Big Tech disrupts the banking industry with Buy Now, Pay Later (BNPL) solutions, digital wallets, and products once exclusive to traditional banks. Super apps are emerging as leaders in Open Finance, while industry boundaries continue to blur.
My colleague Oana Ifrim highlighted the enabling aspect of Open Banking and Open Finance for new business models. Improved data flow among a growing number of parties, driven by better data quality, is fostering informed decisions, and enriching the evolution of these models. Open Banking is creating a larger embedded space, connecting traditionally separate categories.
Oliver Turn summarised the transformative impact of Open Banking and Open Finance on the financial industry in 2023. He outlined key trends such as data sharing, blockchain technology for improved security and transparency, the prevalence of AI-powered financial assistants, and a heightened focus on sustainability with initiatives integrating Environmental, Social, and Governance (ESG) factors into decision-making.
Panagiotis Kriaris contended that Open Banking extends beyond banking, cutting across industries. Originating as a response to banking inefficiencies and to boost competition, Open Banking is evolving into a digital infrastructure, underpinning major innovations in fintech and finance.
Sanjeev Kumar underscored Open Finance APIs as the bedrock of innovation. These APIs actively facilitate sustainable collaborations among evolving banks, a maturing fintech sector, and digital brands seeking embedded finance propositions. Interoperable APIs are poised to unlock a myriad of use cases, support emerging technology experiments, and shape platform business models.
Xavier Gomez provided a comprehensive outlook on the evolution of Open Banking in 2023. He highlighted global expansion, Open Finance adoption, AI integration, banking-fintech consolidation, improved data security, instant payments demand, and ongoing financial innovation. These factors collectively contribute to shaping a dynamic landscape for a more connected and accessible financial future.
In conclusion, the insights from these influential figures underscore the high-powered and transformative nature of Open Banking and Open Finance. As we navigate the ever-evolving financial landscape, these trends will play a pivotal role in defining the future of financial services on a global scale.
This editorial piece was first published in the Open Finance Report 2023. We encourage you to download the report and find out the latest trends and developments in the world of Open Banking and Open Finance, as the road to Open Data continues.
Vlad is a Senior Editor at The Paypers, working on the Banking & Fintech team. He uses his research, content, and people skills for all activities revolving around Open Banking, Open Finance, Embedded Finance, and more. Vlad has a degree in Biology and Molecular Genetics and an extensive background in creative writing. You can reach out to him on LinkedIn or email.
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