How To Monetize Open Finance: Monetize Value; Price The Use Case
Open finance is driven not by regulators but by technologies such as open APIs. This is steadily changing distribution patterns within the industry toward embedded finance — a world of connectivity, with financial services meeting the needs of customers in the moment, in cars, in virtual agents, in shopping apps, and in online marketplaces. If you are asking “How do we monetize open banking?” you need to broaden your scope, because the role of banks is changing. What you deliver is changing. How you deliver is changing. Whom you serve is changing.
The question you should ask is:
“How do we monetize value?”
Financial Services Firms Must Expand Revenue Generation Options
To unlock opportunity, you need first to recognize the pivot from selling products to delivering value, then:
- Design financial solutions for integration to change how you go to market.
- Consider the broader use cases for growth.
- Use a framework to systematically build the monetization strategy.
Forrester’s perspective on the connected future of banking and the role of APIs in building this can help with the first step. Two just-published reports consider the second two angles.
Monetization Extends Beyond Just Charges And Fees
“Use Cases To Monetize Open Finance” steps through the extensions and — differentiating — propositions that financial services firms can offer to add value for their customers, clients, and communities. It steps you through the assets you have, helps you identify who may find value from them, and also the additional benefits you can enable for your firm.
The sister report, “How To Monetize Open Finance And Platform Business Models,” guides you though Forrester’s monetization framework for ecosystems and open finance. Discover what can become a revenue stream, the possible strategies, and when and how to monetize ecosystems successfully. The framework considers the following:
- What do we monetize? What value does the third party get from us, and what form does it take?
- Who do we extract value from? Who is benefiting from the value you provide, and what role do they play?
- When do we levy the charge? When do you charge, and when do you introduce charges?
- Where can we unlock indirect monetization? Evaluate the monetization strategy on the full benefits it delivers to your firm.
- How do we structure the program? How do you balance compensation for the product or service while encouraging ongoing engagement from consumers, partners, and third parties?
I will also be delving into this in more depth in an upcoming webinar on March 23: How To Monetize Open Finance And Platform Business Models. I hope to see you there, and if you have any questions in the meantime, check out the reports linked below.