This article in IBSintelligence highlights research from ACI indicating 90% of banks globally plan to utilize APIs for open banking. Mercator research suggests banks may want to contain their enthusiasm until they have a business plan that proves this effort can be self-sustaining, as described in“Developing an Appropriate and Sustainable Business Plan for an API Portal.” Here are the stats that ACI has made available:
“As open banking continues its rapid ascent, nearly 90% (87%) of banks globally plan to move forward with open APIs, according to new benchmark data, “2018 Global Payments Insight Survey: Retail Banking,” from ACI Worldwide and Ovum. The benchmark, comprised of responses from executives across financial institutions, merchants and billing organisations such as consumer finance and insurance, also showed that the emphasis on real-time payments has doubled from 31% to 62%within a 12-month span.
The explosion of activity in real-time payments and open banking has made payments transformation a key strategic initiative for many institutions globally. Although driven primarily by regulatory mandates in Europe, open banking has taken off in North America due to market competition. For banks, the message is clear; customers prefer real-time payments, whether it’s through a mobile app, or through traditional banking services.
“The dramatic change in attitudes toward both open banking and real-time payments in just one year is telling,” said Craig Ramsey, head of real-time payments, ACI Worldwide. “The big takeaway here is that real-time payments and open banking are set to reshape the competitive landscape, and banks should stay open to the potential new revenue streams and deepened relationships that will be brought to both consumers and merchants.””
Mercator agrees wholeheartedly Craig on this point, we would only add that they should have a documented business plan that indicates how revenue will be generated to compensate for the costs of deploying a portal, which can be a very expensive project in dollars, management, and technical resources.
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group