The current state of personal banking is all about the consumer – and financial institutions are responding by incorporating new personalised and predictive financial technologies that require consumers’ unfettered access to their financial data. As more banks follow suit, the question becomes: how do they differentiate themselves in the world of open banking to help consumers achieve their desired financial outcomes?
The growing trend of utilising advanced financial technologies and the growing consumer desire for seamless account access to help improve their financial lives is ultimately driving the industry toward open banking.
As the open banking landscape continues to evolve, personal financial management will evolve alongside it, and banks must be responsible and thoughtful when implementing new technologies, always keeping the customer and their financial wellness top of mind. In order to be successful, banks need to, above all, provide insightful information that will help consumers understand their finances with minimal effort, and solutions should always centre on helping customers make the right decisions through a deeper understanding of their spending habits and tendencies.
The key for banks to differentiate themselves, while providing benefits to their business and customers, lies in unlocking the full potential of personalised and predictive financial technologies. For example, implementing data aggregation techniques results in allowing the consumer to see a holistic view of their finances, allowing them to better manage and track their spending in one place. Ultimately, this helps them make better-informed decisions leading to improved financial wellness.
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From a bank´s perspective, technologies like data aggregation can help forge stronger relationships with their customers, reducing the likelihood of them looking for financial services elsewhere. Arguably, the biggest benefit for banks in implementing intelligent technologies is that it can help them better understand their customers, in turn allowing them to offer more personalised products and services.
Banks that successfully meet the needs of their customers through simple, secure and open solutions will be most competitive, likely leading to rapid business growth and reaching diverse demographics in a timely manner.
Consumers look to mobile and web applications that easily enable them to do things like make payments and monitor spending activity, and this convenience and data access is driven by the fundamental usage of application program interfaces, which will only grow, thanks to new the Second Payment Services Directive (PSD2) regulations in Europe.
With the implementation of PSD2 in 2018, it will be of paramount importance for banks to prepare themselves for all of the resulting changes, as well as understand how the regulations will transform how consumers access and share their data with financial service providers to leverage tools that improve their financial well-being.