So you are not (yet) part of the select group called CMA9 and you are asking yourself: “Should I wait to be invited or just joint the movement? Is this Open Banking standard really a game changer?” Even though Open Banking was introduced by the CMA order in the UK, in reality, Open Banking is an industry necessity and it is inevitable. The alternative to Open Banking is to fail. If you are waiting for a sign that your organisation should join this new ecosystem, here it is.
Now, before you organise your open banking kick-off meeting, please consider this: the new UK industry standard was introduced a year ago and there are lots of people concerned with the levels of customer awareness (which is very low). As if people would sleep in a queue, Apple event style, every time a bank launches a new thing… come on. Customers don’t care about Open Banking.
In the same way, customers don’t care about the electricity provider every time they plug an electronic device in a power socket. The only expectation is that it should work. The way most banks interact with their customers today is pretty much like utility companies do. Mass propositions, complicated terms and conditions, hidden fees, poor communication and, of course, bad customer service. Yes, there are a few exceptions. Therefore, whether or not customers know about Open Banking is secondary. Banks have a much bigger problem to tackle.
What customers really care about is straightforward, frictionless customer journeys when applying for, using or cancelling a product or service. Now, the reason your organisation should care about Open Banking is because it’s truly the only economically viable and efficient path for banks to be able to make this seamless customer experience possible. So let’s stop talking about low levels of Open Banking adoption and start to design better customer propositions instead. Customers don’t care how you operate your business. (Well, they do, but just a little bit). What they really want from a bank relationship is convenience, transparency, speed and security.
However, to be in a position to offer compelling propositions based on Open Banking standards, non-participant banks will have to navigate the choppy waters of the Open Banking sea. This journey will require an organisational boat that first and foremost satisfies the most important criteria: be able to float (i.e. be compliant with the OB standards). No engines, sails or oars are required at this stage.
Second, an organisation must be agile enough to respond to unexpected market changes. This means an organisation needs to be willing to challenge and constantly adapt its own business model and practices, from the moment they create a product to the moment they distribute them. Don’t worry about the customer knowledge about Open Banking – if you design a compelling Open Banking proposition, the market will pay attention.
Open Banking creates a unique opportunity for banks to augment their existing product offerings as well as create new ones. That’s not just what customers want – that’s what they expect from banks. Remember, when we talk about customer experience, customers don’t compare your organisation to other banks. Their reference point is any organisation that offers digital services. Therefore, look outside your industry for inspiration and stimulate some crosspollination. The window of opportunity is literally open, but for a limited time.