Open banking is making it easier than ever to scale-up in Europe, in more ways than one. Taking technology, creating a knock-out service, and expanding a business across the EU isn’t reserved for huge organisations with astronomical budgets. The doors are wide open for everyone.
Access to tech is no longer an issue. Businesses of all shapes and sizes can build with open banking technology, whether it’s getting an app off the ground on a do-it-yourself platform, or an enterprise wanting a custom-built service. Businesses can aggregate account data across 2,500 banks in Europe, enrich and refine that data to extract its value, enable payments at a fraction of the traditional cost, and build tools that help customers better manage their money - wherever they are.
The technology behind open banking is helping to drive a true single digital market in Europe. helping businesses to standardise processes, improve development and create one solution that can be deployed to every country they want to operate in - at the same time.
The benefits of a single digital market
Let’s take an example of a business that needs to carry out risk assessments to onboard or lend to new customers. Because open banking technology allows businesses to categorise transactions across banks in Europe (to verify income, identify expenses and check mortgage rates), this means they can use the same risk assessment model whether their user is in Germany, Spain, Denmark or whichever country they want to operate in.
Most importantly, because it’s technology led, businesses can centre operations in a single place, no longer having to deploy large numbers of people on the ground, or having the vast expense of setting up shop in each region, making operations much more efficient.
Similarly, if a business is already established in multiple countries, many will be running different legacy systems in each country. This offers little or no opportunity to be joined up, share processes and economies of scale, and grow as one business.
In both cases - whether it's a fledgeling business or an established act - open banking technology doesn’t just radically reduce costs and time-to-market. It’s igniting a vast opportunity for businesses to seamlessly scale-up across Europe.
Open banking is driving this competition not just in financial services, but among merchants, telcos and an entire ecosystem of businesses that innovate upon or get value from payments data. It’s pushing us a step closer to the European Commission’s vision of a single digital market. Propelling multiple industries to innovate, and blurring the lines across businesses and borders.
Not a magical solution – but an opportunity that’s up for grabs
Many financial institutions are slowly but surely starting to get a grasp on how to leverage open banking, and effectively use data to improve upon or expand business operations and services for their customers.
Of course, you can’t just decide to use open banking technology and voilà, operate across every country in Europe. There are registrations and passports to obtain, local legislation to meet and incumbents to familiarise with.
But open banking does offer a real opportunity to accelerate innovation, and consolidate operations to work seamlessly across borders, whether you’re a business giant or tech start-up. It’s just a matter of getting started.