Bankers Expect A Profit Bump From Open Banking

Bankers have high expectations of Open Banking according to a new study from Accenture. More than half expect it will help them grow revenues by 10 percent while a third think it will increase revenues by up to 20 percent.Commercial customers are just as enthusiastic — 35% say they already participate in Open Banking and another 42% plan to this year because they think it will provide more innovative processes and a better customer experience, especially in payments and cash management. Alan McIntyre, a senior managing director at Accenture, said corporations are eager to have better outbound processes to attract clients and improve efficiency.In payments, American banks are looking with a bit of envy at Europeans whose payment system supports bank to bank payments and customer-initiated bank to bank payments that bypass the card networks and save merchants money.Corporations can send out emails with rich information and request a payment immediately from the customer, and even give the customer a choice like paying 50% now and 50% later. That requires good coordination between corporations and banks and also requires payment messages such as the ISO 20022 standard that is being used with real-time payments as the systems roll out. The UK Faster Payments uses an older message type but plans to upgrade to ISO 20022. McIntyre sees a battle for the desktop at SMEs.“Who will own the real estate, will it be the banks or someone like NetSuite or Sage? Who will have the dashboard at the front end? If banks do that, they run the risk of commoditization where someone else will make recommendations on banking products and services without their being involved.”