Open banking has become integral to the digital transformation of financial institutions and spans across all parts of the organisation, both internally as well as externally.
Industry stakeholders are placing their bets on open banking, with enormous investments to back it up – the median open banking spend for financial institutions in Europe lies between €50-€100 million, with 44.8% of financial executives indicating that their investment budgets are even bigger.
But alongside this massive investment, financial executives now need to look at how they will take advantage of open banking to better serve customers and add real value to their business.
Here are our recommendations for how to go about it:
1. Make open banking core to the digital transformation
Open banking has now essentially become a key element of the digital transformation journey for most organisations. In order to get funding for open banking use cases, it’s important to associate these investments with the core strategy for the business. Executives can do this by focusing on the use cases that can be complementary or an extension to the existing objectives for the business lines.
2. Create an open banking roadmap
Despite the astronomical investments in open banking, most financial executives are expecting the payback period for open banking investments to be less than four years. However, mastering open banking and the transformation of the financial services industry will take a lot longer than that.
It's important to stay realistic; every financial institution needs to start somewhere. By creating a roadmap, executives can outline what they hope to achieve long-term, and start laying down the foundation for these objectives today.
3. Focus on low the hanging fruit for your business
Not all decision-makers in financial institutions have access to astronomical open banking investment budgets. And for some, every coin invested needs to count. By focusing on the low-hanging fruit and taking advantage of open banking by operating as a third-party provider, financial executives can experiment with elementary use cases with clear outcomes, before proceeding to more advanced and exploratory use cases.
An open banking scorecard can help measure the impact of investments and help set clear parameters that help navigate the open banking journey.
To find out more about the investments being made in open banking, and to dive deeper into how financial institutions perceive ROI, download our latest report, where we quiz 290 financial executives across Europe on their open banking spend.