The removing of barriers to entry is seen by many as an integral component of having a market driven economy, the Holy Grail for some. While the idea driving the U.K.’s Open Banking Standard and the freer exchange of customer directed information in the EU under the PSD2 directive are examples of lowering barriers to market participation, it is also maintain a steady eye on the preservation of individual privacy and data security.
“The high degree of financial and operational interconnectedness among financial institutions means that a successful cyber attack against a single institution or a key service provider could spread more widely within the financial system.”
Mercator Advisory Group’s observations of the movement to digital banking and the increased adherence to customer-centric strategies are revealing the individualization of banking service delivery will be dependent of wider collaboration among service providers. The leverage of APIs to securely exchange transactional data to provide for the level of personalization banking customers are coming to expect from their other merchant interactions will be critical for FIs to deliver value add services. However, this balancing act will make progress as a measured process rather than a flinging open of the doors that has been envisioned by some alarmists.
Overview by Joseph Walent, Associate Director, Customer Interactions Advisory Service at Mercator Advisory Group
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