Likelihood of Future Role for Banks

Role of banks likely to change in the connected banking ecosystem

With APIs acting as a bridge between systems, banks can gain much more value by viewing them in the big picture. While the customer data they own will enable banks to claim a central role in the evolving digitally connected ecosystem, how large a role they occupy will be up to them. As the new banking models play out, banks will have to make strategic choices about the specific roles they would like to take on in the future, and will need to frame their strategy accordingly.

Opportunities and Challenges

Open banking model brings unprecedented opportunities but not without some challenges

The rise of open banking can introduce innovative ideas which can extend far beyond traditional financial products and services. An open model of banking would enable banks to make significant advancements in numerous areas such as customer experience, risk, distribution capabilities, innovation, and collaborative growth. However, the open banking model also presents challenges, since there will be a need to provide secure links to customer systems and maintain customer privacy. With legacy issues continuing to remain a constraint, open banking may pose the risk of disintermediation by third parties, and thus a potential loss of revenue for banks.