Banking is getting personal – or at least it should be

When it comes to open banking, behavioural finance expert Galina Andreeva is a staunch supporter. But she cautions that the opportunities it presents come with their own risks – and to offer the best service, banks need to understand their customers better than ever before.

Dr Galina Andreeva is an associate professor in management science at the University of Edinburgh Business School. She is an expert in credit, risk and behavioural finance – and today focuses on alternative banking, fintech and improving access to credit. We talked to her about the key changes with open banking, and how to overcome the challenges.

Businesses are always telling customers how important they are. But do they show it? Galina suggests the focus needs to shift – understanding that everyone feels valued and important when they’re treated as an individual. This means tailoring – actions, services and products – based on their behaviour.

Open banking brings a hugely positive disruption in the industry – a power shift back to the consumers when it comes to what is done with their data. But for the banks and fintechs, this change brings with it technical challenges. The next step is figuring out how they’ll process the mountains of data and make sense out of it.

Open banking has also brought new opportunities to open up the credit market up to a larger number of people. But that could mean more over-indebted customers. With access to more customer data, you’ll be able to offer products suited to the individual – and better tools so your customers understand what they’re buying.