Open Banking brings change to digital marketing for finance businesses
As you may be aware, Open Banking launched in the UK on 13th January this year.
Open Banking enables consumers to authorise financial institutions to share their financial information securely with other organisations. This is made possible by the use of open platform technologies and standards, usually in the form of secure APIs (Application Programming Interfaces).
Some of the technological aspects of Open Banking have in fact been operational for some time now. For example, you may already have used a service that logs into your account and ‘scrapes’ the data required. Some forward-thinking financial services organisations have also been offering the ability to share data.
At Xcite Digital we have been privileged to have been part of the vanguard of this financial revolution by working with one of our clients – Fair Business Loans – to promote their use of sharing live bank data via DirectID technology.
But the full launch of Open Banking in the UK will impact on all the UK’s “Big Nine” banks. For years these banks have had exclusive visibility of customer’s financial data. They have information about customers’ regular payments, spending patterns and retailers of choice. But now customers can instruct their banks to share this data with another party such as an independent app or internet service, and the banks cannot refuse.
This means that customers will from now on have control over their financial information and who can access it. They will be able to use a range of financial services from different providers without the need to constantly share credentials with third parties.
Open Banking is therefore likely to cut through the monopoly of the major banks and be a catalyst for more competition in the financial services market. This will have a very significant impact on digital marketing for finance businesses.
You need to ensure that your UX is top notch to win over all the potential new customers who will now be looking more widely for providers of financial products and services. Now is the time to get ahead of the crowd and tailor your digital marketing strategy to be ready for the months ahead.
There are five particular ways that Open Banking will empower consumers. If your product or service is impacted by these changes then you need to ensure that your website fully embraces them and offers the best UX to current and potential clients:
Freedom of choice
Open Banking will transform financial services into a buyer’s market. Not only will it enable more suppliers to be visible and accessible to consumers but it will make the process of transferring between suppliers much quicker and easier. Rather than going through lengthy procedures of form filling and credit checks, consumers will just need to authorise access to their financial data.
This could transform a whole host of transactions, including opening new accounts, switching bank accounts and loan and mortgage applications.
Visibility of all financial information in one place
One of the features of Open Banking is AISPs – Account Information Service Providers. An AISP is a single service to which a customer can login and see all their financial information in one place. Data will be drawn in from each bank and other financial services that they use, enabling customers – and the companies that they authorise – to get a complete overview of their financial position.
Banking gets personal
Being able to see the bigger picture of a customer’s financial position will also enable banks and other authorised financial companies to offer them more personalised and targeted products and services. Machine learning can be used to analyse customers’ spending patterns and monitor large purchases. Customer needs can then be pre-empted and relevant products and services offered. This will enable customers to choose relevant financial services for their real-time need.
Enhanced data protection
On the surface, the concept of Open Banking could appear to raise issues about data security. With so much financial data being shared with different companies, is there an increased risk of data breaches and fraud?
Well in fact the new rules actually enhance data security because data-sharing is now in the hands of the customer. Data can only be shared if a customer specifically chooses to do so. A customer can also determine the amount or specifics of what data is to be shared. Also, every company has to be regulated by the FCA before they are eligible to participate in data sharing.
Direct payments
Open Banking will simplify the process of paying for things online. Most online payments currently utilise a multi-stage process between the retailer, a secure payment service and the customer’s bank. But with Open Banking, a customer can give direct permission for the retailer to access their bank account.
As you can see, the arrival of Open Banking heralds a new dawn in the financial services industry. Customers will have more freedom of choice, and will also be empowered to exercise that freedom as easily as possible.
There is a world of opportunity here in terms of digital marketing for finance businesses. Make sure that when customers come visiting your website they enjoy the best user experience around! You need to find them, engage them, win them and then work hard to keep them. UX is the key to your success in the new world of Open Banking.