The Open Banking Revolution
The Open Banking revolution is rapidly approaching and many banks are starting to take notice. According to McKinsey, open banking and open data have the potential to contribute up to 1.5% of Europe’s GDP in the next decade. However, only 10% of this value can currently be unlocked.
Banks’ Attitudes towards Open Banking.
As the open banking movement gains momentum, banks are beginning to view it as an opportunity rather than a threat. Tink reports that positive attitudes towards open banking reached a peak of 71.1% in 2021, compared to just 55% in 2019. Additionally, 8 out of 10 bank executives consider open banking to be a “revolution” and are making it a higher priority for their organisations.
Advantages of Open Banking.
There are several benefits to open banking that banks are looking to take advantage of. According to bank executives, the top 3 advantages are: improving customer experience, launching new digital services, and increasing revenue.
Next Frontier: Open Finance.
Open finance is also emerging as the next big innovation in banking. This expands upon the concept of open banking by providing consumers with access to their entire financial footprint, including mortgages, savings, pensions, insurance, and consumer credit.
Banks’ Strategies for Fintech.
To stay ahead of the curve, many banks are investing in fintechs and partnering with them to improve their business models. PitchBook Data and Sifted have reported that bank investments in fintechs have almost tripled in the past 5 years. One example of this is NatWest’s recent acquisition of fintech RoosterMoney, which serves the UK youth market and has 130,000 users. NatWest aims to cater to families and respond to their digital needs with this acquisition.
Conclusion.
Overall, it’s clear that the banking industry is rapidly evolving and that open banking and fintech are major disruptors. It’s important for banks to stay up to date on the latest developments and form a strategy for how to approach them.
One example of this is our app Gimi which leverages the concept of open banking by providing families with an app that focuses on teaching children financial literacy. In the Gimi app, children can learn about money through interactive lessons, hands-on money management features such as completing chores, and by evaluating their spending and saving habits.
Additionally, Gimi’s design allows for a dual experience where parents and children are connected allowing parents to have full transparency. Try the Gimi app by clicking on the download button below.