The launch of the Open Banking scheme last week has presented many opportunities, but as one bank has stated, data sharing alone will not revolutionise the market.
The Open Banking scheme began its roll-out on Saturday (13th January), alongside the new EU regulations for PSD2.
Last week, one fintech firm told Specialist Banking that the Open Banking scheme could lead to a host of new providers entering the banking market.
Will Beeson, head of propositions at CivilisedBank (pictured above), believed that to capitalise on the full opportunity presented by Open Banking, traditional banks would require a full-scale overhaul.
"System architecture must prioritise openness and API connectivity and commercial models must adapt to a symbiotic relationship between old and new forms of value delivery.
However, Will felt that the initiative might not provide the huge advantage for smaller banks and fintechs as some have suggested.
"Customer inertia is a powerful force," he added.
"Inevitably, large banks will retain customers despite greater advances by smaller, more nimble players.
"Also, while Open Banking will provide value for many customers, some will feel their needs are sufficiently met in the traditional model."
Will added that smaller, specialist banks had the opportunity to embrace Open Banking and leverage it in the design of differentiated offerings to customers.
"Success won't come through meeting the minimum requirements of the legislation, though.
"Data sharing on its own won't change the competitive landscape."
Marcus Exall, VP of partnerships at Monese (pictured above), said there would be a period of experimentation with Open Banking products and business models before there was any real traction.
"More choice does not necessarily make things easy, but increased transparency and competition has to be good for the consumer in the long term.
"The companies that will succeed will be those that make life simpler for the customer, and new businesses that do this are bound to emerge.
"There may be some short-term head scratching while everybody gets their head around what it all means to both businesses and customers.
"While there has been a lot of coverage about the 'revolution' in banking, there has also been a reasonable amount of coverage of what the media sees as potential security and privacy concerns, so we shouldn't blame customers for not knowing what to think yet."
Benedetta Arese Lucini, co-founder and CEO of Oval Money (pictured above), said: "Open Banking is the beginning of a new era in which banks will increasingly leverage their strength in their distribution network and their existing infrastructure for transactions, partnering with consumer-friendly and data-driven start-ups that can revolutionise the last-mile delivery of financial services."
The Open Banking initiative launches at a time when a number of new banks are already entering the market.
Peer-to-peer platform Zopa is currently in the process of applying for a banking licence, after completing a £32m funding round in June last year.
"About time, Open Banking is an opportunity for financial services companies to actually improve things for consumers," declared Jaidev Janardana, CEO of Zopa (pictured above).
"It's disappointing that some of the traditional banks have delayed their own offerings.
"Open Banking data is set to unlock a world of opportunities for UK consumers to do more with their money, so we're pleased to be one of the first financial services providers to make it a reality."
Marie Steinthaler, head of new products at Zopa, added: "At Zopa, the introduction of Open Banking and PSD2 as a first step allows us to streamline our loan application process so that customers can verify their income in seconds, replacing the manual process of uploading bank statements."
Marie also claimed that Open Banking data would allow the lender to give its customers even better service through more accurate credit scoring, easier product comparison or even just helpful insights into how they can make better financial decisions.
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