New data from open banking platform Tink has revealed that while there is overall positive thinking about open banking within European financial institutions, a lack of internal alignment risks holding them back from realising its full potential.
The findings reveal notable differences in how open banking opportunity is perceived throughout financial institutions and diverging views on open banking capabilities and skills across different parts of the business. This organisational divide reflects the sheer size and scale of the task banks are facing to transform their operations to become open banking ready and meet new customer needs.
According to the new data, over two-thirds (70%) of the C-suite see the opportunity that open banking presents right across their organisation. They also believe it provides good value for money with a similar percentage (67%) believing the benefits outweigh the potential costs. However, whilst senior teams may be buying into open banking, the research paints a more varied picture across other parts of the business. Most channel owners (63%), responsible for the online, mobile or developer interfaces, recognise the open banking opportunity across their organisation. In contrast, less than half (45%) of product owners feel the same way.
Differing views on skills and resourcing requirements may go some way to explaining the levels of buy in for open banking across the business. The majority of respondents in financial institutions are positive about having the talent available within the organisation to execute on open banking objectives (59% on average).
Those who work in IT are the most confident (65%) they have the skills to deliver on open banking, followed by groups working with management (61%) and digital or mobile banking channels (60%). However, only 43% of product owners are confident their team has the required resources to capitalise on open banking.
This might explain a lack of agreement on whether products and services being offered to customers are taking full advantage of the organisation’s open banking capabilities. The overwhelming majority of those within the IT department (67%) said they believe open banking capabilities are being leveraged in this way. This is in stark contrast to under a third (32%) of executives in the digital and mobile banking department who feel the same.
Rafael Plantier, UK and Ireland Country Manager at Tink, said: “Whilst fast-growing challengers in the industry continue to make moves, banks remain in the best position to offer integrated open banking services. As custodians of money and providers of financial services they already have a solid foundation of customers that trust them and are therefore willing to share data.
“However, we should not underestimate the enormity of the task that financial institutions face in transforming their operations to become open banking ready. It is to be expected that there are differing levels of buy in for open banking across the organisation, and pockets of the business that may lag behind in embracing the opportunity.
“As those in the C-suite evolve their open banking strategy, there is an opportunity to fill possible knowledge or culture gaps to ensure alignment. Whether it be through strategic fintech partnerships, acquisitions or internal re-alignment, banks can ensure they are well placed in the race to create the best possible customer experience from open banking.”