We had a great discussion about Open Payments, Open Banking and Open Finance at FinTech Week London* this week. What was interesting is that nearly everyone opened with a mention of customer and customer journeys. Customer is the critical factor here, and customers don’t care whether they’re using Open Finance or not. What they care about is financial services that are easy-to-use, fast, safe and secure. That’s what the Open Finance ecosystem can deliver.
The question therefore is how to make customer journeys fast, easy and safe using open systems.
The first part of that is that you need critical mass. Without critical mass, it’s not worth it. No one makes enough money and opportunities for those offering services are severely limited. Youi need scale, and if that’s not there, then open finance fails.
How do you get scale?
Through common standards that have commonality and consistency. This is why APIs and interoperability come to the fore. You cannot have 1,000 different development structures. You need one that can plug-and-play.
If you have that, you then have conformance for performance. You have scale, ease-of-use, speed and all the factors that will make customer journeys better.
But then you still have a barrier to overcome, which is confidence.
Most consumers don’t trust the idea of open, as they want to keep their data private. So, you shouldn’t talk about open banking or open finance. Customers don’t want to hear that. All they want to hear is about better, faster, easier and more secure finance. Those are the outside-in messages. In fact, as we talk about BaaS, embedded and open ecosystems and platforms, that’s the inside-out view. What’s the customer’s perspective? Focus upon that first or they don’t have confidence.
If they do have confidence, as the benefits are sold, what you get is consent. Customers have to give their consent to allow open finance access to their data. It’s their data; it’s their privacy; it’s their concerns that have to be addressed.
You can only do this from the outside-in view and sell the benefits. Your TV can download your favourite movies; your car can pay for its own parking; your groceries arrive from the order from your fridge; you never miss the best offers because your apps do it for you … and so on and so on. You get the idea. It’s all bout consideration. For every time you allow third party access, you get payback. That’s what customers want, and they must want whatever is being offered to give consent.
I guess that the final point is that you need to show care. Customers need to feel you care about their money and their exposures. They need to feel you are putting their interests first, and not your own. They need to feel that you recognise they are the customer, and they are in charge.
There’s a lot of C's to address here, and I could add more, but I want to leave it there and let you think about it. Meanwhile, a hat-tip to Richard Mould who was on the panel, for his inspiring this blog.
* We had a comedy duo following all of this and my favourite joke of the year has to be: “when I was invited to a FinTech conference, I thought we were going to talk about technologies that help fish”
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...