Open banking services

In Banking and capital markets

Open banking is a disruptive force in the financial services industry. It will change how consumers engage with their banks and financial services providers, introduce new channels and promote innovation and competition in financial products.

What EY can do for you

As Asia-Pacific’s regulators issue more digital banking licenses, traditional institutions are in the same position as heart attack survivors: their only options are to alter their behavior and get fit to compete against strong, new contenders, or resign themselves to slowing down and losing ground. Cosmetic changes, such as wrapping legacy systems in a digital overlay, are not enough. Banks need to completely change their “lifestyle” and become digitally fit.

In response to neobanks, the region’s established banks have been investing in digital transformation for several years. To compete with the slick digital experiences offered by new entrants, their focus has largely been on the customer journey. As a result, mobile apps and digital onboarding have become commonplace across Asia-Pacific. However, as long as banks continue to have legacy operations at the heart of their business, what they can further achieve is quite limited.

Introducing various digital channels without a digital back office is a purely cosmetic change. This is the equivalent of heart attack survivors going on a short-term diet, but not exercising regularly or giving up smoking. They might end up losing a little weight, but their underlying heart health remains at risk.Maintaining a trusted open banking ecosystem requires a clear customer-centric business strategy, new business and operating models, rapid innovation cycles, flexible technology integration, enhanced security and an updated privacy and liability regime. We see open banking as a strategic opportunity for both new and established institutions – and also a strategic risk.

To address the regulatory changes and prepare for the new environment in Europe, banks are establishing transformation programs, with initial focus on meeting regulatory deadlines and delivering good customer outcomes. Banks should now be confident in complying, and put in place robust security measures, develop an understanding of liability and create compelling customer propositions.

In other countries, the regulatory imperative is less, however,  open banking continues to develop, driven by customer expectation and enabled by new technology.

Consumer uptake of open banking is expected to drive new competitive dynamics. Plus, financial services firms will also need to monitor these trends and review appropriateness and sustainability of ongoing business strategies. New data and payments capabilities, through open banking, have the potential to trigger industry-level digital transformation, unlocking innovation and driving competition.

Our capabilities include:

Open banking strategy: Strategic review and scenario analysis under open banking; new business models and opportunities for pursuit.

New proposition, customer experience and service design: We have a full complement of human-centered design services that apply customer research and insight to new proposition development using a proprietary agile service design approach purpose built for open banking and financial services.

Innovation scans and FinTech lifecycle support:

  • Innovation and disruptive capability scans; engagement paths assessed from vendor sourcing to investment; partnership programs from experimentation to production; measuring success; providing decision-making frameworks.
  • M&A and venture capital: Lead advisory support and full suite of diligence (commercial, financial, technical) and legal services.

Regulatory and legal advisory services:

  • Advisory services: For example, assessment of role requirements; evaluation of permission frameworks.
  • Legal advisory services - Commercial: Advisory services such as impact analysis on commercial agreements and arrangements including contracts with third parties.
  • Rules traceability: Regulatory interpretation across General Data Protection Regulation (GDPR); Competition and Markets Authority (CMA); Revised Payments Services Directive (PSD2); program articulation – build and change requirements.

Target operating model: Target operating model design; transformation execution and program management to balance compliant delivery with strategic optionality.

Solution definition: Support for end-to-end solution design from business analysis to IT architecture.

Application program interface (API) - strategy and frame-working: Design, development and maintenance frameworks; API commercial analysis/cost recovery and pricing.

Data analytics: Leveraging data as an asset, from customer insight to operational and end-to-end performance management information (MI).

Security risk framework: Integrated with the operational risk framework to identify security risks, events and consequences including privacy and payment fraud issues.

Cyber risk analysis: Holistic review of cyber defense preparedness including incident identification and response and mandatory reporting requirements.

EY served on the original Open Banking Working Group (OBWG) in the UK, providing policy-framing recommendations, and continues to support the Open Banking Implementation Entity (OBIE) in production of the open API standards. We have extensive experience supporting a breadth of clients from FinTechs to large multinational institutions across financial services and other sectors.

We have a global open banking innovation center to co-create and prototype and test offerings. We also have a comprehensive suite of global services, through local teams, to help our clients with their customer-centric strategy, compliance, operations, technology, security and end-to-end delivery management.

We are ready to support all aspects of your open banking journey.

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