Strong innovation strategies in financial services focus on continually providing the solutions that meet consumers' evolving expectations. But overlooking the technology that powers that experience and allows those solutions to work together is like building a luxury car of the future and forgetting the battery.
For financial institutions, open banking is frequently that battery.
In a recent conversation, Virginia Heyburn, vice president of strategy and business development for Fiserv, said open banking represents a new distribution channel for financial institutions through fintech partnerships and allows for stronger interoperability and seamless data flow among solutions, systems and channels. Translated to a real-world scenario, she said, think of a consumer who starts a loan application but doesn't finish it right away.
"I might pick up a mobile device to start a loan application and then get distracted or just, you know, deal with a toddler sitting on my head and then move to the tablet to continue the process online," Heyburn said. "And I can continue that process because the data is flowing seamlessly. I don't have to reenter information, and I have a clean experience."
Open banking has been a part of financial services for years, but it means different things to different financial institutions. For many, it means opening an avenue toward partnerships with fintechs, allowing them access to banking functionality and data to provide services to consumers.
Heyburn said it's equally important to view open banking as a better model of interoperability within the financial institution.
"It's a fundamental shift from integration to true interoperability of systems, whereby the experience that a customer or member has on one side of that experience is consistent, clean, seamless, fast and easy," she said. "But it's also the experience the associate has as they're interacting with that customer."
How different systems talk to each other has a material influence on the experience for customers, members and associates, Heyburn said. For example, that means efficiently allowing a mobile banking solution to talk to the core or for risk management to talk to the contact center application.
"That to me," she said, "is the promise of open banking."