NEW WORLD OF OPEN BANKING - EXPLOITING INBOUND AND OUTBOUND TRADE OPPORTUNITIES - Accenture
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EXPLOITING
INBOUND AND
OUTBOUND TRADE
OPPORTUNITIES
NEW
THE BRAVE
WORLD
OF OPEN BANKING
THE NEXT CHAPTER IN
WINNING IN THE
DIGITAL ECONOMY
90%
OF BANKERS
Accenture surveyed
believe Open Banking
will boost organic
growth by up to 10%.1
Executive summary 3
What banks can learn from
17th-century dutch traders 4
Outbound trade: stretching
beyond bank walls 8
Inbound trade: just a
plug-and-play away 12
Open banking is here,
whether you like it or not 15
2 | THE BRAVE NEW WORLD OF OPEN BANKING Copyright © 2018 Accenture. All rights reserved.
MANY INDUSTRY
EXECUTIVES AND
COMMENTATORS NOW
VIEW OPEN BANKING
AS AN INEVITABLE
AND ACCELERATING
STRUCTURAL TREND.
However, there are profound • Incumbent banks will need to act
differences of opinion about decisively to secure their share
the impact of Open Banking on of the new value being created,
incumbent banks, as well as the much like the entrepreneurial
actions they should take to shape this traders of the 17th-century open
trend to their advantage. Parallels Dutch economy established
from economic history and from and then dominated profitable
other industries allow us to make trade routes around the world.
a number of key predictions:
• Incumbent banks that focus on
• There will be clear winners and simply harvesting their current
losers, with the outcome largely business franchise should expect
determined by their own actions. rapidly increasing erosion, much
However, the banking industry as like that in the 17th-century
a whole will likely share in a larger closed Japanese economy.
economic pie, as new opportunities
for value creation emerge quicker This report pulls together Accenture’s
than old sources of value erode. recent thinking and research on the
topic of Open Banking. It offers a
• The winners will be those banks view on how incumbent financial
that embrace Open Banking and institutions can act decisively to
modernize their business model, exploit the bilateral trade opportunities
opening it up to third parties of Open Banking, regardless of the
and accepting that the walled broader business model archetype
garden through which banks they choose to adopt in order
enjoyed a privileged position in to win in the digital economy.
the economy is a thing of the past.
• Industry participants will be able to
reap early mover advantage from
both the “export” and “import”
opportunities available to incumbent
and challenger banks alike.
Copyright © 2018 Accenture. All rights reserved. WINNING IN THE DIGITAL ECONOMY SERIES | 3
WHAT BANKS CAN LEARN
FROM 17TH-CENTURY
DUTCH TRADERS
Most banks have been used to The closed version of the Japanese Like Japanese villages, banks have
operating in the equivalent of the economy mirrors traditional banking actively traded with each other, but
17th-century Japanese economy— in many ways. Most banks have have generally been wary of foreigners
a proverbial walled garden, shielded been vertically integrated, covering who might disrupt the old way of
from what was going on in the rest all aspects of the value chain from doing things.
of the world. origination to servicing to risk and
balance sheet management. They have All of that is about to change.
Under the Sakoku Edict of 1635, also benefited from the protection of
Japan closed its borders, isolated regulatory barriers to entry that have
its economy and attempted to generally prevented cross-industry
create a protected and stable threats from retailers, telecoms and
culture that was free from external consumer tech giants, while allowing
influences. Except for limited trade competition between banks to flourish.
with the Dutch East India Company
and Chinese merchants through
the port of Nagasaki, Japan was
a closed economy and a closed
society. Though the Edict was
followed by a period of controlled
social and economic growth,
the Japanese economy and its
culture ultimately stagnated due
to its desire to cling to the past
rather than embrace the future.
65%
OF RESPONDENTS
see Open Banking
as more of an
opportunity
than a threat.
4 | THE BRAVE NEW WORLD OF OPEN BANKING Copyright © 2018 Accenture. All rights reserved.
APIs: a new kind of From a patch of land in Northeast for third parties to connect to
trade route Europe, entrepreneurial merchants not mushroomed from barely double digits
only drove tremendous growth in the a decade ago to over 1,500 in 2017.
Driven by a combination of Dutch economy, but in the process After implementation of PSD2 in 2018,
competitive pressure and regulatory also invented the risk-sharing idea of that number will ratchet up again—
actions like the revised Payment the joint stock company. A large jewel likely by a factor of 10. We estimate
Services Directive (PSD2) in Europe in the state’s trading crown was the that by 2020, €61 BN (seven percent)
and the Open Banking initiative in the Dutch East India Company, founded to of the total banking revenue pool in
UK, banks are being forced to open up stabilize and grow profits in the Dutch Europe will be associated with Open
and operate in a world where the value spice trade. At its speculative height, Banking-enabled activities.3
chain is becoming more fragmented the Dutch East India Company was
and the competitive environment more worth $7.9 trillion in today’s terms— Banks now need to embrace Open
intense. In this brave new world, bank more than 20 of the world’s biggest Banking to remain competitive,
customers will be able to share access companies today combined, according relevant and win in the digital
to their financial data with non-bank to Visual Capitalist.2 Economic success economy. In our survey of executives
third parties through open application enabled the Dutch to enjoy a Golden at 100 large banks, 65 percent of
programming interfaces (APIs). Third Age characterized by a cosmopolitan respondents see Open Banking
parties will be able to integrate their society that generated some of the as more of an opportunity than a
services with those of a bank to create world’s great visual art, and a tolerant threat; 52 percent see it as a way to
a better consumer experience. So, and open approach to ideas and differentiate from their traditional
what’s coming in banking is more religion—all despite a lack of natural competitors; and 99 percent plan
akin to the 17th-century Dutch resources and frequent political to make major investments in Open
economy than the closed world turbulence in Europe. Banking initiatives by 2020 (Figure 2).
of 17th-century Japan.
Accenture research suggests that
While Japan was shutting its doors, banks know that the Japanese closed-
the Dutch Republic was fine-tuning economy model is no longer viable.
a network of global trade routes and Figure 1 shows that even ahead of
1,675
commercial partnerships that covered regulatory compulsion in Europe, Value added
the known world—including Japan. the number of banking APIs available services*
1,347 Digital
currencies
FIGURE 1. Growth in Financial 1,066
Payments
Services related APIS
2005-2017 cumulative numbers 911
*Other includes: coupon, rewards, monetization,
marketplace and insurance 703
Source: Accenture Research based on
Programmable Web API Dashboard
455
Banking
& capital
markets
179
111
68
2 5 12 38
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Copyright © 2018 Accenture. All rights reserved. WINNING IN THE DIGITAL ECONOMY SERIES | 5
Value creation through At the macro level, classical differently from the rest of the
bilateral trade mastery economist David Riccardo economy. However, the trajectory
demonstrated that open trade can of Open Banking regulation and the
The disaggregation of the banking benefit both parties and lead to ambition of global tech competitors
value chain, including proliferation higher levels of overall economic like Alibaba, Amazon and Tencent
of partnership interfaces, is still in activity through the exploitation of suggests that this tactic is unlikely to
its early days, but the trend is quite comparative advantage. Conversely, succeed, and that the competitive
clear: Open Banking will fast become at the micro level, there will still be environment will inevitably become
an industry reality. As it develops, relative winners and losers. The trials more complex and heterogeneous.
there will undoubtedly be winners of traditional telecoms players—as The ability of national regulators to
and losers among incumbent banks. the mobile profit pool moved from implement meaningful protection
networks to search, content providers or trade barriers is becoming
and social media—is a cautionary politically untenable and will be
tale. As in all trade relationships, practically less feasible over time.
the losers are likely to revert to
protectionism, and claim that banking
is special and needs to be treated
FIGURE 2. Banks investing
to be open
Source: Accenture Open Banking Pulse Survey, 2017
When do you plan to make your major investments in Open Banking
or PSD2-related initiatives?
1% 3% 0% 0%
No plan beyond compliance 3%
4% 3% 5%
By 2020
10% 9%
By 2019 16%
29%
63%
70%
By 2018 61 %
51%
Already invested 18% 23%
14 % 17%
Global APAC Europe North
America
6 | THE BRAVE NEW WORLD OF OPEN BANKING Copyright © 2018 Accenture. All rights reserved.
To capitalize on Open Banking and
their strategic investments in it,
Just like other digital businesses,
banks will also need to learn the
By 2020,
banks will need to master the art of importance of being “discoverable” European banks
both interdependence and bilateral
trade. The winners will create value
through the APIs they publish. Just as
PayPal is discoverable through its API
that exploit
from both export and import flows portal, allowing millions of new online Open Banking to
and will skillfully navigate a far more
competitive market, where strategic
retailers to connect to its network each
year—which then drives its end-user
become digital
threats can come from almost numbers and transaction growth— leaders may
any sector. They will also need to
compete in a world where non-banks
banks need third parties to be able
to find them in the digital ecosystem
generate up to:
20%
will be able to create a reasonable so that those third parties can do
facsimile of a traditional banking the work required to make banking
relationship from component parts, services available to their customers. of lending
often through partnerships, and look revenue pool
21%
to monetize their customer reach,
trust and loyalty through financial
of current
services—all at an accelerating pace. account
revenue pool
17% of payments
12% of retail
investments5
Copyright © 2018 Accenture. All rights reserved. WINNING IN THE DIGITAL ECONOMY SERIES | 7
OUTBOUND TRADE:
STRETCHING BEYOND
BANK WALLS TO BETTER
SERVE CUSTOMERS
From an export perspective, with As long as they are relevant, easy to For example, DBS in Singapore
customers’ permission, banks use and discoverable, third parties recently launched an API developer
subject to PSD2 in Europe are being will do the heavy lifting in terms of portal that makes available 155
compelled to make raw account data developing the propositions that services, including rewards, payments
(including transaction history and attract others to use APIs to create and fund transfers.6 These services
balances) available to third parties new and improved offerings for end have already been used by partners
in a regulated and secure way via customers. Just like watching a child like McDonalds and Property Guru to
a set of standard APIs. Third-party create amazing structures from a pile improve their offerings to customers.
providers (everyone from other of simple Lego bricks, banks may In Europe, BNP has partnered with the
banks, fintechs, retailers, telecoms, be surprised by what third parties Open Bank Project7 to make a wide
insurers and wealth managers) can can create with their services. range of APIs available in a sandbox
then use those APIs to embed that environment in which developers can
information into their platforms to In North America and Asia, there experiment before going live with
improve the products and services isn’t a regulatory compulsion to customer offerings that incorporate
they offer. This will be equivalent to break apart the traditional bank value atomized banking services like identity
the way digital developers can quickly chain. However, there is increasing management. As the experience in
link to Google Maps or put a “Sign competitive pressure and a presumed leading Open Banking markets shows,
in with Facebook” button on their first-mover advantage that accrues the basis of competition effectively
apps or website. Under PSD2, third from creating a partnership model or shifts from fully-integrated banking
parties can also initiate bank-to-bank by establishing API dominance early. solutions to banks competing through
payment transactions on behalf of the The proliferation of bank developer portals to entice more developers to
customer. The beauty of APIs is that portals, where third parties can use component services of the bank.
the publishing bank does not need to access APIs, speaks to the pressure
second guess how the component that banks in these markets feel to
services they are offering will be used. export customer data, enable bank
micro-services and build strategic
partnerships that benefit their
end customers.
8 | THE BRAVE NEW WORLD OF OPEN BANKING Copyright © 2018 Accenture. All rights reserved.
Opportunities Banks can extend their API Mastercard has also been aggressively
in the outbound development beyond the minimum unbundling its card services into
regulatory requirements to offer a myriad of component APIs,
Though this export-like flow exposes existing customers new services including a tokenization service
some of banks’ data, algorithms and (such as single sign on, pay with that is powering Paypal’s Braintree
processes to outside risks (like the credit card rewards points and business for merchants.12 US person-
cannibalization of previously captive credit draw down), and export data to-person payments network ZelleSM
revenue), it also presents significant to personal finance managers or (which processed over 60 million
opportunities for banks to improve small business accounting apps like transactions in the third quarter of
their customer experience, grow Quickbooks and Xero. Banks can 2017), is using APIs to atomize and
new revenue streams, monetize also sell their specialized services to re-bundle payments elements, and
existing assets and participate other parties; for example, consumer then sell them back to participating
in a larger, mutually-beneficial credit check services to fintechs banks.13 For business customers, U.S.
ecosystem. In exposing APIs to or identity management tools (like Bank is placing its Accounts Payable
third-party developers, banks will KYC) to smaller banks to enable their Optimizer app inside the Sage Live
be forced to more rapidly innovate business. In some areas, such as accounting platform, providing cash
to meet the expectations of this the export of small business data to flow analysis to help Sage’s small- to
demanding, real-time community. accounting apps, these integrations medium-sized business customers
have existed for a while, but they in the US and Canada maximize their
By taking on the new roles of Payment were bespoke and constrained. In working capital and manage their
Initiation Service Provider (PISP) contrast, we are now moving into a cash flow in near real-time.14 These are
and Account Information Service world where these types of interfaces just a few examples of banks building
Provider (AISP) introduced by PSD2, will be standardized and information customer loyalty and generating new
banks can create new products and sharing will become the rule rather business by exporting information
services, and enable others to create than the negotiated exception. and services. It is clear from these
new propositions, business models examples that there is no reverting
and great customer experiences Based on the combination of back to a protected ecosystem.
that then amplify banks’ reach and regulation, customer expectations
distribution. PISPs—Sofort, Trustly and improved technology, we are
and iDEAL8, for example—initiate now seeing a proliferation of use
online payments to an e-merchant cases in Open Banking. Capital One’s
on behalf of a customer, creating Bank Account Starter API allows
an alternative to card payments for consumers to apply for, share some
both customers and merchants. basic information, and open a savings
Mint.com is a leading example of an account quickly and easily right from
AISP, extracting and consolidating a third-party site.10 All of BBVA’s open
customer account information to help APIs are commercially available to its
consumers organize and manage Spanish customers for a fee; a retail
their personal finances. Mint currently shopper, for example, might finance
has more than 15 million users.9 a purchase using a loan from BBVA by
clicking the loan button embedded in
the retailer’s checkout screen.11
Copyright © 2018 Accenture. All rights reserved. WINNING IN THE DIGITAL ECONOMY SERIES | 9
Outbound As technology improves and interfaces
partnership plays standardize, it will become easier for
more and more non-banks to monetize
Easier integration of banking their distribution reach and customer Now open: Bank
products with third-party services trust through a partnership with a business models best
can also enable banks to extend traditional bank. In this type of model, suited to exporting
their distribution reach by partnering the challenge for the banks will be to
with organizations that have a loyal remain the preferred partner rather Of the four banking archetypes
customer base. In the US, CBW is than being reduced to a commodity Accenture identified as winning
a small community bank in Kansas product provider. models for banks in the digital
now run by an ex-Google engineer. age, two are best placed to
It offers some 500 APIs and already exploit outbound Open Banking19:
has 140 external partners, extending
Getting outbound right
CBW’s business model well beyond • Digital Category Killers can
Like the charts, navigational aids
what a traditional small-town bank become ubiquitous and build
and better ship designs that Dutch
could have achieved.15 Many of those a best-in-class brand that
traders invested in to help them
500 APIs may never be used, but people value and competitors
navigate unfamiliar seas, banks will
maybe one of them will become a are unable to duplicate. Think
need to invest in how they will exploit
ubiquitous Google Maps-like success PayPal, Square®, Quicken
outbound export opportunities.
story, resulting in huge demand for Loans®, Rocket Mortgage® and
As they enable other company’s
API calls, and the emergence of yet Betterment. For incumbent
business models, they will need to
unknown new business models. It is banks, building new Category
figure out how to avoid becoming a
worth remembering that Uber, Lyft Killers may be a way to become
commodity and disappearing behind
and the whole ride sharing business more open quickly. They can
the commercial curtain in the way that
model only emerged because then look to migrate the rest
payments are automated and buried
Google published its Map API. of the bank to that model
out of customers’ view in apps like
over time or build a linked
Starbucks and Uber. In the US, 8 million
In the UK, through its partnership with portfolio of those offerings
customers now pay via the Starbucks
the Post Office, the Bank of Ireland that begins to replicate a
app, accounting for 30 percent of the
offers 2.4 million+ customers access traditional comprehensive
coffee giant’s transactions in US stores,
to everything from savings and loans banking offering.
but the card that funds those payments
to foreign exchange, credit cards
never floats to the surface of the app.17 • Utility Providers like BNY
and mortgages at over 11,000 Post
In retail, Walmart Pay is enrolling tens Mellon and ClearBank® can
Office branches.16 From the customer
of thousands of new users a day, up maximize their reach by
perspective, they are banking with
from thousands four or five months working behind-the-scenes with
the Post Office; in reality, the Bank of
ago, and is now close to surpassing a focus on being easy to work
Ireland is the provider, using third-party
Apple Pay in usage for mobile with and simple to connect
partnerships to grow its balance sheet
payments in the US.18 The contest to. In a more fragmented
outside of its home market.
is undoubtedly shifting from value world, there will be more
being in the ownership of a payments partners looking to draw on
relationship to being the platform third-party capabilities. Being
through which clients interact. the scale, low-cost provider
of those services could be an
attractive growth strategy.
10 | THE BRAVE NEW WORLD OF OPEN BANKING Copyright © 2018 Accenture. All rights reserved.It is unclear whether banks are the However, it remains to be seen whether Without these economic incentives,
most likely candidates to win in the having full account transparency and there is the possibility that PSD2 and
information aggregation space. In easy information sharing (rather than third-party payment initiation will fail
looking to act as an information screen scraping) results in a circular to meet expectations as customers
aggregator, banks will need to firing squad that drives down industry will see no compelling reason to
differentiate themselves from the profitability by encouraging banks to change, particularly if a strong
services already offered by companies chase passive balances at competitors two-factor authentication leads
like Sofort, Yodlee and Moven. with aggressive consolidation offers to a clunky customer experience
Accenture research shows that and holistic relationship pricing. versus current alternatives.
consumers between 55 and 64 years Likewise, it remains to be seen
old are the least likely to try aggregator whether the scope of information This also raises the broader question
services, with slightly more than aggregation provided by banks of whether the growth in outbound
half saying that they would not trust relative to digital native firms will be Open Banking is more likely to be
anyone to aggregate their account sufficiently attractive to millennials. driven by collaboration or regulation.
information.20 For this cohort, there Consider that the growth of iDEAL
may well be a meaningful opportunity The same challenge will also hold for in the Netherlands’ bill pay market
for banks to act as a trusted payments initiation services under is attributable to collaboration
information aggregator. PSD2. With PayPal already offering around providing a better customer
One Touch payments and both Visa experience rather than a response to a
Compare this with 18-to-24 year and Mastercard pushing similar regulatory mandate. While much of the
olds, where 85 percent would trust accelerated ecommerce checkout focus over the next 18 months will be
a third-party to aggregate their bank options, customer convenience and on seeing how consumers in Europe
data. More than 50 percent of those user experience are unlikely to be react to the outcome of Open Banking
surveyed holding accounts with the compelling reason to use a new regulations, even faster progress
four banks would try an aggregation payments initiation service. Far more may be made in markets where the
service, but there will need to be likely is merchants partnering with trend to be more open is driven by
obvious value added to make it banks to circumvent existing card competitive pressures and where there
sticky. Even before the official networks to find cheaper ways to are fewer constraints and regulation
launch of PSD2 in Europe, we have accept online debit payments and around how it will actually happen.
already seen HSBC in the UK try to enhance the customer experience
capture first-mover advantage with through services like easier refunds.
its account aggregation service21; Still, to incent customers to use new
other big banks in the UK are now payment initiation services, some of
considering how to respond. merchants’ savings will need to be
passed on to the end user.
Copyright © 2018 Accenture. All rights reserved. WINNING IN THE DIGITAL ECONOMY SERIES | 11INBOUND TRADE:
JUST A PLUG-AND-PLAY AWAY
The other direction of trade in the JPMorgan Chase is drawing on its Adding non-banking
bilateral world of Open Banking is partnership with OnDeck to power products and services,
imports. This is where banks can its online lending services to small such as home, auto,
easily incorporate product and businesses, providing them access
consumer goods purchases
service features from third-party to quick loans that they may not
partners into their own offerings. This want on their balance sheet.22 There
and travel services
can be everything from data (such is also the opportunity for banks to Banks can also use the import aspects
as free credit scores) to merchant- participate further in such growth of Open Banking to extend their
funded rewards, to a card network by providing the wholesale funding services beyond those traditionally
offering an easy “on/off” switch for lines required by these partners. offered by banks and broaden
issuers to incorporate into their In the UK, challenger Starling Bank their proposition beyond financial
mobile app. These services are readily has partnered with TransferWise, services to more complete customer
available today from various parties, the retail FX payments platform, to journeys. Accenture research shows
but few banks have meaningfully provide Starling Bank customers that 48 percent of consumers want
imported the full breadth of these direct, in-app access to TransferWise’s banks to play a role in the purchasing
capabilities into their offerings. Doing service.23 Such enhanced offerings process for non-banking products.24
so can rapidly enhance personalized can make banks appear to be open By forward integrating into areas like
banking customer service, build and innovative by offering best-in- real estate search or partnering with
customer loyalty, generate new breed products without undermining car dealers to show local inventory,
fees and lower banks’ operating the economics of the core lending banks can better link their financing
costs. For banks, this import flow and deposit products that drive their products to the broader customer
presents a two-fold opportunity: business. The ability to easily import decision process. A good example is
third-party products will also raise the Commonwealth Bank in Australia that
metabolic rate of traditional banks. The has grown its mortgage business by
Adding banking products best APIs are built often and fast, so aggressively forward integrating into
and services that banks the era of bringing a banking product real estate search.25 In the corporate
don’t want to offer, can’t to market, such as a new credit card, world, the equivalent could be
offer or can’t offer as well over a nine- to 18-month period is business information services and
as others quickly disappearing. Banks should a procurement offer that monitors
be able to take, for example, a sales transaction activity, and makes
All banks make choices about the loan API for a seasonal promotion recommendations around supplier
risk profile that they want to have, from idea to market in a few weeks or relationships based on that flow. In
the products they offer and the even days, and without the constraint many cases, banks are also sitting
customers they serve based on of the offering being necessarily on existing capabilities that could
that profile. With the easy ability dependent on bank systems, balance be exposed directly to customers
to import and incorporate third- sheet or servicing capabilities. This with little incremental cost.
party products, banks can offer requires a very different mindset from
loans, insurance products or today—one that is critical to success
money transmission products that in the new era of Open Banking.
lie outside of their risk appetite.
12 | THE BRAVE NEW WORLD OF OPEN BANKING Copyright © 2018 Accenture. All rights reserved.For example, most banks offering One way in which this is being enabled
proprietary travel rewards programs is through core banking providers
already have access to tremendous with plug-and-play environments that
buying power that could readily be de-risk banks’ experimentation with
made accessible to customers outside new offerings. Fractal, for example, is
of the credit card program. However, building its Customer Genomics on top
Now open: Bank models
in all these cases, banks need to of Finastra’s Fusion Fabric platform-as-
be careful that the financing or the a-service so that banks can plug-and-
bound for importing
transaction services that they offer are play the customer analytics service Of the four banking archetypes
pivotal enough to anchor a broader to help them reach new customers.26 Accenture identified as winning
customer journey. As the Starbucks Also, Temenos has created a models for banks in the digital
example shows, when the banking marketplace for its T24 core banking age, two are best placed to
product is just a commodity enabler, platform27 that will function as an app exploit inbound Open Banking28:
it is very easy for banks to disappear store, making it easy to access an
behind the commercial curtain approved and standardized set of new • Digital Relationship Managers
and lose relevance and salience. services on an API-based plug-and- can extend their business
play basis—similar to how consumers model to capture more of
trust apps that they download from their customers’ wallets and
Lowering costs by making the Apple App Store. These structures embed themselves in more
it easier to interact will help shift fintech business models transactions, for example,
with fintechs from business-to-consumer (B2C) or Danske Bank’s Sunday Property
business-to-business (B2B) to B2B2B Search and Digital Mortgage
Open Banking is also making it easier
or B2B2C, tapping into banks’ existing service in Denmark and BBVA’s
for banks to embrace the range of
customer bases. Some banks— white goods store in Spain.
product and service opportunities
perhaps, newcomers like solarisBank—
offered by fintech startups. Big banks • Platform Players can allow
can even take an Amazon-like
can usually partner directly with customers to assemble a
approach to Open Banking and only
fintechs to self-educate, experiment complete best-in-breed
provide third-party products under a
and often figure out how to build financial services product suite
full platform-based business approach.
services themselves. Yet, smaller by partnering with specialists
Unlike the incumbents, they don’t
banks often struggle to figure out in each area and providing the
have the economic cannibalization
how to engage with fintechs in a aggregation and social layer
risk associated with stepping away
way that allows them to keep pace that sits on top. Fidor Bank is
from product provision and therefore
with the innovation metabolism of trying to do this in Germany
can focus purely on offering only the
the largest players in the industry. and is also offering its banking-
very best products integrated in a
seamless way and attempt to make platform-as-a-service to allow
money from this orchestration role. others to create financial
services marketplaces under
their own brand.
Copyright © 2018 Accenture. All rights reserved. WINNING IN THE DIGITAL ECONOMY SERIES | 13Getting inbound right Ultimately, banks will need to
determine in what areas can they
The big challenge for banks with credibly operate as platform players.
inbound trade ambitions is how to Doing so will be fundamentally
differentiate. Access to Google Maps, challenging, as most banks are
for example, no longer differentiates national or regional. In contrast,
an app; instead, it’s table stakes most digital platform players, such
and a hygiene factor. In retail, all as Google, Facebook and Alibaba,
the shopping malls look the same are inherently global. Likewise, it is
in Dubai and Singapore, as each unclear whether the core offering
developer wants the same global of banking is sufficiently compelling
brands to attract shoppers without to be a platform. However, there are
taking a risk on local businesses elements closely related to banking
that lack customer recognition. that could be—for example, identity
management, financial literacy and
Banks will need to work hard to find advice, home ownership and savings.
distinctions for their brand when For banks to win as platform players,
everyone has the same plug-and- they will need to figure out how to
play products. The need to stand exploit the brave new world of Open
out from the crowd will elevate bank Banking and the full range of import-
marketing to the same status as export opportunities that it creates
risk management. The big question in a business model more akin to the
is, what will truly drive customer vision of 17th-century Dutch traders.
engagement and wallet consolidation
for banks? Beyond mortgages, how
far can a financing proposition go in
driving traffic and capturing more
complete customer journeys? Will
non-bank platforms—whether they
offer lattes, rideshares or photo
sharing—win the day? Or, might an
innovation like mobile payments be
the anchor that integrates merchant
rewards, transaction advice and
an easy payment experience to
allow banks to keep their direct
connection with their customers?
14 | THE BRAVE NEW WORLD OF OPEN BANKING Copyright © 2018 Accenture. All rights reserved.OPEN BANKING IS HERE,
WHETHER YOU LIKE IT
OR NOT
The decision whether to open the Who knows what would have In this brave new world, banks will
Japanese economy to a broader set of happened had Japan remained need to navigate a complex world of
trading relationships was taken out of isolated? All we know is what did bilateral exports and imports, and find
Japanese hands on July 8, 1853, when happen: that Japan became a ways to tilt the Open Banking scales
Commodore Matthew Perry of the global economic powerhouse and a toward opportunities rather than
United States Navy sailed into Tokyo technological innovator without losing threats. Done correctly, banks can
Bay with a squadron of warships. Perry its unique culture. While regulatory thrive—strengthening their customer
demanded a treaty permitting trade intervention around Open Banking may franchises and brand, maintaining a
with the United States and, after 200 be just as unwelcome as Commodore defined culture, and growing business
years of isolation, Japan began to Perry was, like the Japanese, banks through open collaboration with the
reopen to the outside world. really have no choice but to modernize world beyond financial services.
and open themselves to a broader set
of trading relationships. One could well
argue that today’s “Commodore Perry”
are both the European regulators and
the digital giants that now comprise
the world’s most valuable companies:
Apple, Google, Amazon, Facebook
and Alibaba, to name a few.
Accenture has extensive experience
in banking and payments to help
banks find their optimal routes to
exploit the Open Banking opportunity
and sail around any threat.
CONTACT US
Alan McIntyre
Senior Managing Director,
Accenture Global Banking
a.mcintyre@accenture.com
Andrew McFarlane
Accenture Global Open Banking &
European PSD2 Lead
andrew.g.mcfarlane@accenture.com
Copyright © 2018 Accenture. All rights reserved. WINNING IN THE DIGITAL ECONOMY SERIES | 15ABOUT ACCENTURE ENDNOTES
Accenture is a leading global professional 1 Accenture Open Banking Pulse Survey, 2017, a global quantitative online pulse survey of 100
payment executives within the Banking industry in North America, Europe and Asia Pacific who are
services company, providing a broad familiar with Open Banking and/or the Revised Payment Services Directive (PSD2). The study focused
range of services and solutions in on organizations with revenue higher than $3bn for organizations in Asia Pacific, Belgium, Denmark,
Netherlands and Sweden and higher than $5bn for organizations in the US, Canada, the UK, Spain,
strategy, consulting, digital, technology Italy, France and Germany. Fieldwork was carried out between August 8th and 28th 2017.
and operations. Combining unmatched https://www.accenture.com/us-en/insight-open-banking-trends
experience and specialized skills 2 Visual Capitalists, “Infographic: The Most Valuable Companies of All-Time, December 8, 2017.
across more than 40 industries and all http://www.visualcapitalist.com/most-valuable-companies-all-time/
business functions—underpinned by 3 Accenture Open Banking Revenue Model, 2017. https://www.accenture.com/us-en/insight-open-
banking-trends
the world’s largest delivery network—
Accenture works at the intersection 4 Accenture Open Banking Pulse Survey, 2017. https://www.accenture.com/us-en/insight-open-
banking-trends
of business and technology to help
5 Accenture Open Banking Revenue Model, 2017. https://www.accenture.com/us-en/insight-open-
clients improve their performance banking-trends
and create sustainable value for their
6 Bank Innovation, “Singapore’s DBS Bank Launches ‘World’s Largest API Platform’,” November 3, 2017.
stakeholders. With more than 435,000 https://bankinnovation.net/2017/11/singapores-dbs-bank-launches-worlds-largest-api-platform/
people serving clients in more than 120 7 Open Bank Project, https://openbankproject.com
countries, Accenture drives innovation
8 Reuters, “Trustly hits 3.5 bln euro run rate in processed payments,” October 18, 2016. http://www.
to improve the way the world works and reuters.com/article/trustly/trustly-hits-3-5-bln-euro-run-rate-in-processed-payments-idUSL8N1CN33I
lives. Visit us at www.accenture.com. 9 InvestorJunkie, “Mint.com Review 2017 – The Bill Pay, Budgeting, and Tracking App,” October 20, 2017.
https://investorjunkie.com/54/mint-com-review/
10 Capital One DevExchange, https://developer.capitalone.com/products/bank-account-starter/homepage/
11 BusinessInsider, “BBVA puts its open APIs into the wild,” May 25, 2017. http://www.businessinsider.
com/bbva-puts-its-open-apis-into-the-wild-2017-5
12 Mastercard, “PayPal and Mastercard Expand Partnership to Benefit Consumers, Merchants and
Financial Institutions,” September 6, 2016. https://newsroom.mastercard.com/press-releases/paypal-
and-mastercard-expand-partnership-to-benefit-consumers-merchants-and-financial-institutions/
13 Zelle, “Zelle Now Live! In Mobile Banking Apps Today, a New Way to Pay,” June 12, 2017.
https://www.zellepay.com/zelle-now-live-in-mobile-banking-apps
14 Small Business Trends, “U.S. Bank and Sage Announce AP Optimizer to Streamline Invoice Payments,”
July 28, 2016. https://smallbiztrends.com/2016/07/sage-partner-us-bank-cash-flow-statement.html
15 Fortune, “Why Fintech Startups Are Flocking to a 124-Year-Old Bank in Kansas,” August 24, 2016.
http://fortune.com/2016/08/24/fintech-bank/
16 Bank of Ireland. https://www.bankofirelanduk.com/about/partnerships/post-office/
17 GeekWire, “Mobile payments now account for 30% of Starbucks transactions as company posts
$5.7B in revenue,” July 27, 2017. https://www.geekwire.com/2017/mobile-payment-now-accounts-30-
starbucks-transactions-company-posts-5-7b-revenue/
18 Bloomberg, “Walmart Pay Could Surpass Apple in U.S. Mobile Payments,” November 7, 2017.
https://www.bloomberg.com/news/articles/2017-11-07/walmart-pay-threatens-to-surpass-apple-in-u-s-
mobile-payments
19 https://www.accenture.com/us-en/insight-banking-winning-digital-economy
20 Accenture, “Consumers’ initial reactions to the new services enabled by PSD2,” 2017.
https://www.accenture.com/gb-en/insight-consumer-reactions-aisp-pisp-new-psd2-enabled-services
21 CNBC, “HSBC to let UK customers manage different bank accounts on one screen with new app,”
September 28, 2017. https://www.cnbc.com/2017/09/27/hsbc-beta-app-lets-uk-customers-manage-
different-bank-accounts.html
22 PYMNTS, “JPMorgan Chase and OnDeck shake hands on another 4 years,” August 8, 2017.
https://www.pymnts.com/smbs/2017/jpmorgan-chase-ondeck-extend-digital-banking-lending-
partnership-for-smbs/
23 StarlingBank, “TransferWise announces first UK bank partnership with Starling Bank,” March 15, 2017.
www.accenture.com/banking https://www.starlingbank.com/news/transferwise-uk-bank-partnership-starling-bank/
Accenture Banking 24 Accenture 2017 Global Distribution & Marketing Consumer Study. https://www.accenture.com/us-
en/insight-banking-distribution-marketing-consumer-study
@bankinginsights 25 CommBank, https://www.commbank.com.au/digital/home-buying/search
Accenture Banking blog 26 BankingTech, “Misys unveils Platform-as-a-Service strategy, opens up core platforms for third
parties,” September 20, 2016. http://www.bankingtech.com/586712/misys-unveils-platform-as-a-service-
strategy-opens-up-core-platforms-for-third-parties/
27 Temenos, https://marketplace.temenos.com/home
28 https://www.accenture.com/us-en/insight-banking-winning-digital-economy
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