Open Banking Challenges

Becoming insight driven with Open Banking

Given breakthroughs in analytics, the better use of ‘big data’ and the continued growth of the Fintech scene, APIs are receiving renewed attention to enhance the delivery of financial services to both retail and business markets.

Although the core API value proposition lies in streamlining the systems integration, there is a fine line to walk when educating and empowering consumers without confusing, scaring, or boring them about the use of such tools.

I see the use of Open Banking by the UK Gaming Operators in a similar light; if I consent to sharing my banking data with you, what’s in it for me?

There are no doubt guardrails needed to address the privacy & security concerns around personal data.

Just one of the challenges facing the Gaming Operators.

Educating end users on data permission and ownership creates another.

Managing the consent process adds yet another tier of complexity, particularly when sharing of Open Banking facilitated, transactional information with any number of different or other institutions becomes the norm – above and beyond the Gaming Operators of choice.

And, there is currently no central repository that holds the permissions granted.

PSD2 empowers account holders to share data and therefore remove their bank from the equation as the traditional gatekeeper of such information.

With Open Banking, a Gaming Operator will have better understanding of the products their customers have, hold or use more generally.

This includes the use of other Gaming Operators within the list of their banking transactions.

Think … Operator A sees Operator B as a payee / beneficiary and Operator B is getting a higher ‘share of wallet’ than Operator A currently does.

Do they use hyper-targeting tools to win them back?

In order to capitalise on Open Banking, Operators may need to become more insight driven and to embed more analysis, more data and more reasoning into their decision-making processes.

With a wider view of the customer, an Operator gains access to additional information about how their end customers spend their money and therefore can update their relevant risk, pricing and cross sell models accordingly.

All subject to the purpose for which customers have provided the consent to share the information in the first place of course.

  • With Open Banking, an Operator will have better information sooner about a customers’ preferences, risk profile and persona that can, in turn, help them on-board faster and ‘price’ better
  • With Open Banking, an Operator can partner with other retailers to provide personalised offers on the products that their customers are more likely to buy
  • With Open Banking, an Operator can see exactly what a customer spends with or receives from other Gaming Operators; how much, when and how often
  • With Open Banking, an Operator can better identify if their customers are getting into financial difficulty, when it should may have been flagged to them sooner

Although the lines of responsibility start to get blurred here.

With Open Banking, an Operator can better help their customers better manage their finances using dashboards and other useful financial tools.

Open banking will, in my opinion, accelerate the importance of an Operators approach to analytics, AI and automation.

It is therefore critical to get these capabilities in place to ‘road-test’ them early.

The W2 team have been exhibiting at the Betting on Sport event in London this week (stand P7).

We welcome a face to face discussion on what opportunities that you think Open Banking presents to the UKs operator community. As our clients well know, we take what we hear from such events as the steer on what’s needed next on the Product Roadmap.

You can feed into what we build.

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