Open banking represents a large opportunity to innovate and transform the scope and scale of the whole financial services industry. Once a few strong ideas find success and gain traction in the market, consumers will start adopting the technology and open banking will really take off.
To reap the benefits of open banking, banks need to embrace the new regulations and view them as an opportunity rather than a threat.
The pace of change is quicker now that businesses have had to eliminate manual and paper-based processes almost overnight. Businesses coping in the pandemic have the urgent need to eliminate these processes and are looking to their banks to help them implement them quickly. Paper-based and manual processes that don’t work anymore for most businesses — such as physically walking into a bank branch to submit business data or sending and receiving paper checks from the headquarters — are the processes that "ERP banking" can automate.
This has effectively catapulted ERP banking toward becoming a mission-critical service. ERP to bank integration enables organizations to automate manual processes, such as data entry. Not only does this increase data accuracy and provide better insight, but it also allows you to reduce dependency on the internal workforce, enabling you to divert that all-important resource to analysis and value-added activities.
Banks had long-term innovation goals before, but no one expected they were going to have to implement them so quickly. The pandemic has pushed banks to suddenly push forward with their innovation goals.
New technology breeds new technologies. People are consuming new experiences and doing so more efficiently, allowing both existing players and new entrants to prosper. Applying these new technologies can enhance all banks’ capabilities and deliver on the expectations of these increasingly tech-savvy consumers. In addition, startup activity tends to increase after a significant economic event (i.e., the global pandemic and resulting economic depression), and the innovations started in those early recovery periods typically become anchors for the next economic cycle. So I think we will see an uptick in fintech startup activity and as a result, more innovative and customer-centric business banking experiences.
