Technology is evolving much faster than enterprises are able to adapt. This is true not just in banking, but across industry. These days banks want a technology partner that can not only do the integration but also recognise that integration is about more than the data exchange — it also has to help them with data governance.
And while the change ushered in by Open Banking might start slowly — three quarters of consumers are still unaware of the concept — the overseas experience suggests a strong acceleration of Open Banking services might come once the infrastructure is in place.
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In Australia, the Big Four banks are already working with partners to test their capabilities following the passage of the Consumer Data Right legislation earlier this year. And in February 2020, subject to regulatory agreement, the full regime will come into play. The ACCC has already said it wants to add 100 banks to that regime in the first year — a very ambitious timetable.
Open Banking is customer-focused, and encourages competition by creating a more level playing field where the banks can use new services to try to win customers from traditional competitors. Fintechs can compete, or partner to build new services at scale.
It also offers those same banks the opportunity to participate in a totally new sector — the data sector — as both a contributor and the beneficiary. Yet, while data is the most underutilised asset banks have, it is likely to be a few years before we see truly disruptive business cases emerge.
Currently, most of the banks are running their Open Banking programs at a compliance and operational readiness phase, and many will use this opportunity to reduce their technology debt.
It is important to remember that this is not simply a matter of old technology versus new technology. It is often replacing inefficient processes that were poorly implemented, integrated or architected.
There are five steps banks can take to overcome this technology debt:
- Start with fixing integration, and particularly the way apps are integrated — banks and fintechs often have many such apps;
- Next, create reliable and accessible master data, which is necessary to move into the customer experience transformation and quality data-sharing pathway;
- Govern and collect the data, which is key to the business;
- Enable data-sharing between partners;
- Create workflows to streamline business and improve the experience for customers.
Of course, large incumbent businesses like banks and other financial institutions are not starting with the benefit of a clean slate. And it is customers who immediately notice when integration is not optimal.
The reality of the existing hybrid footprint of applications is that some are easy to work with, while others are not.
Integration, meanwhile, is driving the end-to-end speed of any related business processes.
That is why banks now understand that to thrive in this digital age, they need a technology foundation that makes information, interactions and indeed innovations flow faster through their ecosystems.
Data is the fuel that drives these ecosystems, and every organisation wants to leverage that data to deliver new services, to engage their customers in a more cohesive manner.
Boomi’s approach is to provide a platform that enables this by unifying everything and everyone — so that applications can work more harmoniously together by accessing the data they need when they need it.
In this way, Boomi gives them the speed and agility they need for the future.