A year ago in LFP060 (currently the 2nd most downloaded episode) we covered Open Banking/PSD2 from a Regulatory perspective. In this episode Louise Beaumont argues forcefully that Reg & Tech perspectives are “necessary but not sufficient”. To do Open Banking “well” means to utterly rethink ones strategy.
Louise is the co-Chair of the Open Bank Working Group at techUK , member of the UK Govt’s Open Bank Implementation Entity and Strategic Advisor Open Bank at Publicis.Sapient and thus sees Open Banking from many sides.
She was also on the show three years ago in LFP011, she was a co-founder of Platform Black, the then number two in the UK Fintech Invoice Discounting sector so has plenty of deep background in the Fintech Revolution. Indeed LFP011 was precisely around what she saw as the 5 Key Challenges facing Fintechs growth (which seem appropriate to this day).
So with that track record behind her we can anticipate that her views on Open Banking/PSD2 will be equally relevant in several years’ time too.
So if a year ago we looked into what this is all about and where it is coming from, we can now examine where we are and critically what the key factors for success are in practice.
What are the threats?
What are the opportunities?
Is sharing your customers data so well you lose them all success?
All these topics and more are discussed on the show including:
- Satanism (?!) – Louise’s stepsons documentary on Satanism in South-East London and other documentaries from cricket in Rwanda to sport in Beirut
- Satanism and Feminism (which I’d love to misquote :-D)
- “Drunk with Blood – God’s Killings in the Bible” (Amazon link) – an interesting work where someone literally went through the bible line by line totting up how many folk God killed and how many Satan killed
- Fintech has been going on now so long its possible to have had a career of several gigs in Fintech, as Louise has; Louise’s motivations and career
- disruption vs disruptive people…
- legislation and regulation as boundaries or opportunities
- the Competition and Markets Authority’s attitude of regulation as a tool to enable greater competition
- the “CMA9” are: Barclays, Lloyds, Santander, Danske, HSBC, RBS, Bank of Ireland, Nationwide and AIBG
- more information about the process of API/open-banking is here
- cf Financial Services Authority vs Financial Products Authority
- the fundamental angle is of switching to a consumer focused perspective rather than producer based perspective
- profitability and such a change in banking mentality
- “data is at the heart of the battle for relevance”
- data is the white gold of not just FS but services in general
- the nature of data in this market is becoming open and accessible from closed and siloed
- customers now own their data and we can expect increasing expectations about what they will expect from their data
- the people who can harness this data in really smart ways, in really engaging, relevant personalised ways
- “those organisations which will win will seek data not just donate it”
- cf leaking data with leaking blood
- “those banks that are looking at Open Banking from a purely reg/tech perspective are de facto saying that they will just be a passive data doner”
- the mentality that you, as a bank, will lose data is at the heart of the recipe for failure – there being far more data outside your bank than inside it
- “incrementalism feels safe but you can become utterly irrelevant pretty fast”
- “there should be a profound strategic response in the board rooms of every bank”
- rational trust in banks versus emotional trust and engagement
- Open Ecosystems depend on partnerships; the key to success here is a mentality of partnerships of equals
- Types of Open Ecosystem partnership:
- augmenting your data to build pooled datasets
- enabling your platform – data science and banks
- anticipating needs – mining data
- co-creating new propositions – unmet/under-served needs
- “own the moment” – pre-empting, personalising & leveraging partner touch-points
- Models of partnership
- “enhanced” (eg HSBC)
- “unbundled” (eg BBVA)
- “integrated” (eg Starling)
- “bank as an everyday partner” (the real potential)
- Louise’s commercial intertest is in working with firms to help drive their Open Ecosystem Partnership strategy/rollout
- Publicis.Sapient as a combination of advertising/marketing & tech
And much much more 🙂
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