The grand experiment in Open Banking underway in the U.K. provides a glimpse of what we will eventually come to experience in the U.S. financial services market. While the evolutionary process will most certainly be more market driven than legislated or regulated in the U.S., the endpoint of an markedly more empowered consumer will be the result in any case.
It’s therefore important to take into account all available and meaningful information about the customer to drive better engagement, gain more revenue and increase long-term loyalty. Not only will customers feel that they are understood, employees will be better equipped to serve them through having the right data at their fingertips. This in turn reduces negative online buzz, restores trust in banks, and reduces the likelihood of customer attrition.
Mercator Advisory Group anticipates the access to technology the bigger financial institutions enjoyed as an advantage over smaller institutions will rapidly diminish in scope as the transportability and interoperability of financial data becomes a reality over the next several years. We expect those financial institutions that are best able to retain the core principles of their business that attracted customers in the first place will gain market stature. Individual consumers will be the ultimate beneficiaries as they will retain more of their funds with the reduction of fees and greater financial flexibility determined on an individual level.
As with other industries, all facets of financial services are becoming increasingly digitised. New technologies and capabilities that are focused on returning the customer to the heart of the business will revolutionise the industry. In any industry there will be winners and losers and those that best accommodate these changes are the ones that will come out on top.
Overview by Joseph Walent, Associate Director, Customer Interactions Advisory Service at Mercator Advisory Group
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