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Banks embrace open banking in face of fintech competition

Banks are changing their attitude and approach towards opening banking, with 69 per cent of banks saying that open banking is more of an opportunity than a threat, according to a survey by Temenos.

It found that customer retention is the top industry challenge and open banking is helping them to address this. Open banking is now viewed as a priority by 51 per cent of respondents, up from just 30 per cent a year ago. This means that more banks are now convinced of the value of application programming interfaces (APIs), which may mean collaboration with fintechs and will lead the way to new types of services for bank customers.

PSD2 spurs banks to innovate

The report stated: “To leverage the open banking opportunity, banks are realizing that they must capitalize on their vast stores of customer data and strong position of customer trust to become digital advisors to customers enabling them to make smart financial decisions and introducing them to a broader-range of services through third parties.”

The issue of 'open banking' and data sharing is particularly relevant as banks prepare to comply with the Payment Services Directive 2 (PSD2), which will require European banks to share customer data with third-party providers.


CTMfile take: To counter the threat from fintechs, many banks are investing heavily in IT systems and digital channels, which is good news for their corporate clients. The banking industry is changing quickly and corporates will benefit, as greater access to data and more competition drives banks to innovate and improve services as they compete for customer loyalty.

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