Banks see growth opportunity from Open Banking
HALF of banks expect Open Banking to boost their revenues from business customers over the next five years, research shows.
Analysis by Accenture Research found 90 per cent of banks see the data-sharing initiative as a “key strategic initiative in their digital transformation” when it comes to working with small- and medium-sized enterprises (SMEs) and large corporations.
More than 85 per cent said they have already invested in Open Banking for commercial clients or plan to do so in 2019.
Accenture Research surveyed executives at 100 global banks, 330 SMEs and 330 large corporations, and found 68 per cent would prefer to access Open Banking through their bank, with 55 per cent keen to do it through a third-party provider.
The research highlighted US peer-to-peer lender LendingClub as an example of alternative platforms using Open Banking to access real-time data and interact with banks, but said traditional financial institutions have an advantage due to “stronger trust bonds” with their commercial customers “built on a heritage of data security and privacy.”
“Incumbents can draw on their still-preferred positioning to help corporates improve the way they manage their business particularly working capital by easily and quickly accessing their banking information across multiple banking relationships and initiating transactions on a real-time basis from multiple sources,” the report said.
“Banks can then use this extra data to credit score and analyse their commercial customers more effectively, resulting in better outcomes like more accurate lending, pre-approved loan amounts and dynamic loan pricing.”