Open Banking Implementation Issues Give Rise To A New Breed Of Intermediaries
For banks, open banking implementation is not straightforward — differing standards, specifications, and deployments result in the need to resolve complexity across interfaces. Open banking intermediaries are forming a new technology segment within financial services to meet this need and simplify compliance, offering integration and aggregation layers between banks and third-party providers. VCs poured over $841 million into the sector in 2019 alone. My recent report presents a review of the emerging sector and a sample of the vendors within it to help banks and system integrators understand what is on offer and inform their technology strategies.
Most Banks Need Help Implementing Open Banking
First and foremost, open banking intermediaries offer a quick route to compliance, but they also are a gateway to the wider world of integration and connected ecosystems. The scale of the bank also influences options — size may enable building the solution in-house if a bank has the talent (or can attract it); otherwise, assisted implementation or a turnkey solution may remain the realistic alternatives.
Use Our New Tech To Understand Market Trends
“New Tech: Open Banking Intermediaries, Q2 2020” helps you get a rapid handle on the shape of the market and understand the differing flavors of intermediaries and their features, as well as the relative maturity within this new area. The report provides a quick taxonomy of features and looks at 35 providers, noting which ones are specialists in one area, such as data aggregation or payments, and which offer combinations of functionality — all the way to offering third-party product and service marketplaces. Intermediaries have the potential to offer an important strategic component in banking architecture, translating the communication pathways between many organizations — a codec for financial services, if you will. Banks must choose based on needs but with future growth in mind — if they need to use one at all.
The Future Is Opening For Constellations Of Value
In the month that Australia became the latest in a long line of countries to switch on open banking, part of their Consumer Data Right, which will ultimately include open data access for health, retail, utilities, telecoms, and government services, it really is the time for banks to start viewing open finance strategically. Give it time, and we predict a future where banks will draw connections between ecosystems, platforms, and marketplaces to assemble constellations of value — interoperable, trusted environments that enable collaborators beyond banking that weave value into frictionless, rich customer journeys. Welcome to the constellation business model. I’ll save that for a future report — in the meantime, I hope you find the review of the open banking intermediary sector useful, and please let me know if we can help further.