Although some of these open banking use cases may be familiar to financial institutions, they are increasingly being adopted by other industries as well.
As open banking matures, more businesses will be able to offer embedded financial services.
This means that financial incumbents will be challenged to keep up with the pace of innovation and forced to fence off new generations of market entrants.
One of the key trends in the transition towards an open banking ecosystem is the blurring of boundaries between industries. Although finance has always been the bedrock upon which many businesses operate, it’s becoming increasingly embedded into the services that consumers and businesses enjoy every day.
There are already plenty of existing examples of non-financial institutions moving across industries. Online and physical retailers (Tesco, Walmart
, Amazon), hotel chains (Hilton, Marriott, Best Western), and telcos (Orange, Vodafone, Telefonica) have moved into the realm of banking, seeking opportunities to create loyalty programmes, offer financing, and improve customer experiences with embedded finance.
Why does this matter? We believe financial institutions need to be on their toes and should not lay down innovation budgets, as they should continue to focus on creating improved digital services for their customers.