Operating in an Open World; Open Finance

Operating in an Open World; Open Finance

We live in a world where we readily share our personal data; we have to in order to access online goods and services. But this is where the sharing ends; our providers keep our data private, meaning if we want to order or pay for something, book travel, check our financial situation, upgrade the mobile or transfer money, we have to use different apps or websites, which takes time.

Digitalisation is meant to simplify everyday transactions, yet it can make our customer journey difficult. Our data, for example, may sit in silos spanning: bank, mortgage, savings and credit card accounts, pension, insurance, utility, retail, leisure and travel providers, plus local restaurants and venues. That’s a lot of organisations to interact with.

In an open world, businesses will have permission to securely share our data, so we can access everything we need to maintain our lifestyle via single ecosystems.

Open Finance

Within an Open Finance (OF) context, it’s already happening. Financial services’ firms, partners and third-party providers are developing ecosystems to offer tailored, better-value products and services, and in doing so, they’re creating reputations for innovation, enhancing the customer experience and increasing market share.

In the future, a personal finance management dashboard, for example, could consolidate all activity (from different providers/accounts) into a single app, giving us a simple overview. After analysing transactional data, the dashboard may notice a skiing holiday is booked and so offer discounts with a skiwear provider and tailored travel insurance.

Digital experiences are already replacing some elements of human interaction and soon, they’ll be even more intuitive, reminding us of the things we need, before we’ve even thought of it (such as renewing a passport for that skiing holiday). Here, we explain what’s needed to progress in an open journey and share the experiences of those we support.

The open journey

At Sensedia, we’re passionate about helping financial services providers develop and implement online solutions so they can compete and thrive in an open environment, no matter where in the digital journey. We believe reaching new customers and markets, developing new revenue streams, monetising services and increasing efficiency/agility is something everyone can do. The journey is simple:

Step 1: API Strategy

In order to compete in an open world, you need an Application Programming Interface (API). It’s the digital glue that enables data to be shared securely across legacy systems, mobile applications, cloud services etc - connecting businesses, partners and third-party providers across the whole ecosystem.

Security mechanisms such as encryption technology for data authentication and authorisation are crucial elements of API design. They ensure you meet governance and compliance regulations, logging who’s consuming the APIs, when and where, through which device and application.

An API however, is more than a facilitator and compliance tool; it’s a strategic weapon.

Top priority when designing and building an API is to develop it in line with your strategic goals. For example, if your goal is to extend revenue streams, the API must give insights into data consumption and data intelligence, informing where and how to increase market share.

One client we helped to achieve this is Natura, a leading Brazilian cosmetic company. Watch the Natura video on our website to find out more.

Step 2: New partners

They are to be embraced, not viewed as the competition. New partnership business models should focus on creating a new ecosystem, merging data, providing highly-personalised products and services and enhancing the customer experience. We have teams to help with partner/system integration and marketplace development.

Step 3: News business models

Is it time for a revamp and investment in new digital products and revenue streams? How about repositioning your company along the Bank as a Service model?

Whatever stage you’re at; we’re by your side, every step of the way. Count on Sensedia!