The Open Banking Summit was held in Sydney on 26 September. Speakers informed, challenged and left participants to consider the impacts within their own organisations on topics such as customer experience, consent management & digital ID, open governance, the role of fintech’s, security and the role of the customer in an Open Banking framework.

While many specific questions were answered, one broader question left outstanding was, where to from here? All banks need to develop a strategy on how they will approach Open Banking, and beyond compliance this is where the creativity starts. Success will be measured against the objectives of increased competition and innovation for consumers and banks have a unique opportunity to achieve success by redefining their customer engagement.

Dr Leila Fourie CEO AusPayNet gave a good overview of Open Banking and more broadly, the open economy, and a roundup of Australia’s progress relative to other markets. She also spoke of the interplay between open banking, digital identity and consent management and that some of the authentication issues that we may experience in the early stages of Open Banking should disappear with the introduction of a digital identity capability. Leila also touched on some of the main challenges which include confidence and trust, security, consent, privacy, reputational risk and education.

Tony Fish – Co-Founder Allternet challenged the audience with some strong opinions: 1. that you can’t regulate for innovation and markets should move to an open governance framework, 2. Legacy databases have value but you only need the next transaction to gain an advantage (i.e. current transactions are worth more than historical) and 3. To date Fintech’s have not grown the market – they have been stealing margin and customers – but Open Banking should grow the market and lead to a larger pie.

Seshika Fernando – Head of Financial solutions WSO2 said that Data receivers are not the enemy of banks. They will be the face to your customers and will be some of your main customer touch points and channels, thus you need to embrace them as important partners in your business. Sheshika added “Contrary to popular belief, the future is not bleak for banks that open up their data. Banks can use Third Party Providers to augment the customer experiences and focus more on their core competency – creating great financial products and services.”

In one of the panel sessions where data privacy and consent were discussed, a comment was made that everyone says privacy is paramount, as long as it doesn’t introduce friction. Customers hate the interruption and thus on balance customers always gravitate to the best customer experience rather than the most secure solution.

David Beardmore, Commercial Director Open Data Institute gave an overview of Open Banking in UK. One of the key differences in the UK is that third-parties can not only access data, but they can also initiate transactions. One of the key lessons learned in the UK was that it was viewed as a compliance and technical project by the banks and what it meant to the customer was overlooked completely. Australia should avoid this problem given that the Consumer Data Right puts the customer at the centre of Open Banking and it radiates from there. Interestingly, the rationale for Open Banking in Australia almost completely mirrors that of the UK – competition, innovation and access to data.

Author: Michael Swannell Former Associate, Brisbane, Payments Consulting Network.