What new roles could a bank adopt in this transformed environment? New products and services: what opportunities does open banking provide?

Transcription

1

2 1 What new roles could a bank adopt in this transformed environment? 2 New products and services: what opportunities does open banking provide? 3 How can the relationship between the bank and customer be rejuvenated?

3 +>900% 3,105 1,

4 A lot to deliver, and some of this will be complex with issues to solve Jan 18 Ongoing Feb 18 Aug 18 Feb 19 Sep 19 Release 1 Release 2 Release 3 Release 4 Open Data for standard back book products Discovery Standards Implement Open Data (Frontbook) API Standards (PCA & BCA) Single immediate payment Dispute resolution framework Directory Usage MI Two way notification of revocation Evaluation of efficacy of consumer authentication Authentication step aligned to PSD2 (redirection, pass-through, decoupled) Future dated payments and standing orders Confirmation of funds Reverse payments Trusted beneficiary exemptions under SCA Status of payment International payments (write) Discovery Standards Evaluation Discovery Standards Discovery Standards Evaluation Discovery Evaluation Evaluation Implement Implement Implement Discovery Standards Implement Evaluation Standards In parallel to the development of API standards scheme elements such as dispute and liability rules will also require to be developed Implement Strong customer authentication Consumer Comms BACS, CHAPS bulk and Batch payments Multi authorisation for SME Service quality metrics (as per CMA order) Discovery Standards Implement Evaluation Evaluation

5 CUSTOMERS Customers Third-party suppliers Customer, client, bank product data Customer, client, bank product data Price comparison websites Source: Deloitte analysis

6 Source: Deloitte analysis

7 API definition & management CYBG Open Banking Strategy Underpinned by UK/EU Industry Developments

8 Source: A.T. Kearney Banking Models Not Mutually Exclusive Traditional Banking Platform Banking Distributor Distribution & User Interface (Bank owns) Distribution & User Interface (Third Party owns) Distribution & User Interface (Bank owns) Internal Interface External APIs External APIs Manufacturing Layer (Banks owns) Highly Regulated Manufacturing Layer (Banks owns) Highly Regulated Manufacturing Layer (Bank and Third Party owns) Highly Regulated Value lies with the bank banks own the distribution and infrastructure layer Banks develop products internally or integrate white-label third party products opportunistically Value is shifted towards third parties as the owners of the customer relationship Third parties create new products and offerings for bank customers on top of the bank s core infrastructure Banks exploit value in customer relationship, and E2E on some products Access to third parties banks create a broader more efficient product set and customer offering Distribute Manufacture Service shared shared

9 1 Banks, retailers and fintechs are all developing front end customer solutions A service pulling together holistic view of customers finances & saving time 2 Expanding the scope of products beyond those required by PSD2 now expected by most firms 3 Provision of non-banking information will add value over and above what banks alone can provide

10 Very likely Quite likely 34% Greater likelihood among younger consumers Neither likely nor unlikely Quite unlikely 52% aged % aged Very unlikely Don't Know Openness to adoption of Account Aggregation apps, particularly strong among younger consumers I already do this Results based on 1,015 UK banking consumers nationally representative interviews conducted online in October 2017 It wouldn't be secure (e.g. the data may fall into the wrong It would be an invasion of my privacy 19% I don't feel my finances are complicated enough for me to 18% I would not trust the recommendations made by the service 12% It would mean third parties may try to contact me (e.g. sales 6% It would be too complicated to use 2% I would be concerned that service providers will use my data 2% I would be concerned that the deals would not cover all 1% Other 4% Don't know 3% 31% Security of data is a key issue All figures are from YouGov Plc. Total sample size was 4458 adults, of which 192 reside in the North East. Fieldwork was undertaken between 9th - 13th February The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).

11 1 2 3 Account aggregation Opening your banking app and being able to see a list of all of your accounts, no matter the bank you are with! 3 rd party access Users will be able to authorise 3 rd parties to access their banking details without having to provide login details to help get consumers better deals

12 Are you aware of Open Banking? Yes, and I knew exactly what it is 6% Yes, and I had some idea of what it is 23% As you previously mentioned you were aware of Open Banking, how excited are you about it? Very excited Somewhat excited 2% 12% Yes, but I had no idea what it is No, I had not 12% 58% Not very excited Not at all excited Don't know 5% 31% 50% Net: Aware of open banking 42% Net: Excited 14% Net: Not Excited 81% Will you use 'Open Banking' when it becomes available to get better deals and make online payments from your current account through a 3rd party provider s website? Very likely Fairly likely Fairly unlikely Very unlikely Don't know Net: Likely Net: Not Likely 2% 9% 12% 11% 22% 55% 77% All figures are from YouGov Plc. Total sample size was 4458 adults, of which 192 reside in the North East. Fieldwork was undertaken between 9th - 13th February The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).

13 building a complete view of individual customer needs and how customers choose to meet those needs at the product level designing experiences that delight the customer across multiple channels that are simple and easy to use, digital and straight from start to finish understanding bank strengths and weaknesses in the eyes of customers relative to direct competitors and digital alternatives for key customer segments using data to personalise those experiences, such as providing propositions aligned to customer life events using data pools to predict customer needs, proactively avoid unpleasant experiences and recover customers when things don t go to plan Deepening your relationship with your customers Already got access to a sizeable pool of customers Opportunity to understand these customers better than competitors Customers are more willing to share more data with their main provider Opportunity to build on this competitive edge

14 More about making the financial lives of the consumers better Changing relationship Thus creating more competition, transparency and ultimately putting control where it belongs, in the consumers hands. by changing the dynamics of the Bank/customer relationship, moving it beyond just the transaction