What will the killer open banking app be?
Dutch consumers have shown willingness to share information when the payoff is perceived to be worth it. Social media use is high in the Netherlands. The country has been home to innovative financial services apps such as Tikkie, an app which lets friends repay small loans quickly and has attracted more than 3 million users (about 20% of the population) in just two years. It is likely to be a similar “killer app” that leverages PSD2 and convinces Dutch consumers of the benefits of open banking.
Developing killer apps required innovation. Our research found the Netherlands comparatively lower down the Index on innovation, but we see many signs of strong progress on this front. In particular, collaboration between banks and FinTechs is growing and boosting innovation in the sector. Notable recent examples include: a partnership between ING and a British firm Funding Options to launch a platform that helps SMEs compare different funding options; and a partnership between Dutch private bank Van Lanschot and German FinTech Fidor, which allows Van Lanschot to leverage Fidor’s open APIs to offer customers a better payment experience.
For FinTechs, partnering with a bank is the easiest route to high customer volume while, for banks, these initiatives are part of a wider strategy to build, buy or invest in innovation. As many Dutch banks move on from the risk and regulatory projects that dominated focus in recent years, innovation is a bigger priority and institutions are considering how to best transform for a digital future, which will include open banking.
Preparing to compete in this future will require banks to develop a clear strategic path, by first determining just which role they will play in an expanding financial ecosystem, enabled by open banking and powered by technology. Banks will need to provide innovative products and services that win over consumers, or excel in outstanding customer experiences. Others may focus on providing banking operations and technology. However they shape their digital future, Dutch banks will need to embed flexibility into their business model, and be prepared to adapt and innovate in response to the evolution of open banking and the new competition it brings.