Customer Experience Is King When It Comes to Open Banking Success

By Robert Frendo, managing director, services, Versent

As open banking moves into phase two in Australia what have we learnt? What progress is being made? Well, the uptake is still relatively low. The big banks are still reeling from the Royal Commission findings last year and the global pandemic has meant many are having to accommodate customers who have lost their jobs and can’t make their loan or mortgage payments.

Open banking is certainly ‘on the agenda’ for banks and financial organisations, but it has fallen down the priority list. Open banking promises a wonderful new world for the customer, of course. A world in which with a few swipes on a smartphone, you can find a better mortgage, compare household bills, cancel unwanted subscriptions, control direct debits and track payments across each of your accounts.

When many families are struggling under financial strain, making it easier to find the best deal on your home loan or household bills is very appealing But many banks have left it in the ‘too hard basket’ and haven’t embraced the idea that open banking gives them the opportunity to be the ‘supermarket of services’ to consumers and, in turn, gain a competitive advantage and new customers.

Strong security at the core

If open banking is to drive competition and innovation, giving consumers a better deal, it must be done with privacy and the security of personal data foremost in mind. At Versent, we have recently completed a number of projects enabling open banking based on the Ping Identity suite. This platform ensures banks and financial organisations not only meet ‘Consumer Data Rights’ (CDR)requirements but are also aligned with PSD2 and Financial grade API requirements.

Whilst a strong, resilient, enterprise grade identity and access management system is core to open banking, it isn’t the only factor for success.

Customer experience is key

Open banking is focused on delivering a better experience to consumers, from making it easier to compare and access innovative financial products to giving them more control over how and when their financial data is shared. While the user experience is to some degree defined by the standards, there is opportunity for both data holders and data recipients to differentiate their services through this experience.

If the authentication and consent experience isn’t good, for example if a customer has to move through a multistep recovery system with several click-through pages, potential time delays and sometimes a phone call where they’re required to recall a password, it’s likely that customer won’t come back.

Therefore, banks and financial organisations need to consider the customer experience they’re providing to their customers and ultimately the organisations that provide the best experience will stand to gain the most.

Gaining deeper insights improves customer experience

Customer experience is the benchmark for open banking success. Customers want more from their banks than favourable interest rates. They want to know they are valued; they want a personal, quality service.

Open banking gives banks this opportunity to personalise their service, to monetise customer information and share it in a secure ecosystem where integrated parties are vetted by the government before they can participate. By analysing spending patterns, service providers can provide a targeted experience – airlines can calculate which customers are open to upgrades or electronics retailers can determine which TVs are within a person’s budget. Although, a balance has to be found between balancing these opportunities, personalising those offers and retaining customer confidence.

Open banking is here to stay. And although adoption has been slow so far in Australia, this will increase over the coming months as more banks onboard before the July 2021 deadline and also as more recipients are accredited by the ACCC to retrieve customer information.

Security of customer data is of course imperative, but ultimately as the ability to switch banks becomes easier and competition increases, it’s the quality of the customer experience and what data recipients do with the data that will determine open banking and wider CDR success and deliver financial profits in 2021.