Open Banking Demands Foresight, but Indicates Robust New Revenue Streams: World Retail Banking Report 2017

Banks must embrace and lead the evolution into Open Banking or
risk disintermediation

PARIS & NEW YORK–(BUSINESS WIRE)–The Open Banking1 evolution continues to
unfold. Banks risk disintermediation
2 if they
do not carefully 1) choose their customer-interaction business model
role, and 2) use application programming interfaces (APIs)
according to the
Retail Banking Report 2017
(WRBR 2017) from Capgemini
and Efma. Banks, in collaboration with FinTechs, can lead the Open
Banking movement by offering their customer bases innovative and
personalized services that create new revenue streams and provide more
value to customers.

“FinTechs are now earning higher positive customer experience scores
than traditional banks, and banks are openly seeking to collaborate with
FinTechs. Open Banking offers banks an opportunity to retain and grow
their customer base as they add the varied services of third parties to
personalize and customize products and services. For banks that don’t
think strategically and establish a role in Open Banking, there is a
chance they will be disintermediated from their customers,”
Anirban Bose, Global Head of Banking and Capital Markets, Capgemini.
“It is imperative that banks consider business transformation approaches
now, to establish and solidify their long-term base in Open Banking.”

APIs Offer a Pathway to Open Banking Transformation

The WRBR 2017 details how APIs offer a pathway toward Open Banking,
where FinTechs and financial institutions collaborate rather than
compete to create customer-centric solutions. Though APIs raise some
security and privacy concerns, they are seen as crucial in allowing
banks to take advantage of FinTech ingenuity without having to make
major changes to existing infrastructures.

The most successful banks will use open APIs to generate new
customer insights and revenue streams, while also improving customer
said Vincent Bastid, Secretary General, Efma. “Many
banks currently use APIs internally to improve information flow between
legacy systems. In fact, we are already seeing early adopter banks
asserting their role in Open Banking by proactively making their systems
and data available to third parties and creating new revenue streams.”

Collaboration Is Key to the Future of Open Banking

Exactly how the evolution toward Open Banking will play out is far from
clear. A majority of FinTech respondents (53.8 percent) and banks (43.5
percent) envision a future in which banks and FinTechs work together to
build cross-industry platforms with bundled, complementary services that
benefit customers. A less likely but still plausible outcome is that
banks will continue to provide products and services but leave
distribution to FinTechs, BigTech, or other new open platforms. This has
the potential to lower customer acquisition costs but raises issues
related to disintermediation branding and customer ownership. Nearly
half (47.8 percent) of FinTechs predict this future scenario compared to
only 28.8 percent of banks.

This year’s WRBR also quantified the robust appetite for closer
partnerships between FinTechs and banks going forward. The vast majority
of banks (91.3 percent) and most FinTechs (75.3 percent) say they expect
to collaborate in the future, with banks providing access to their broad
resources, experience and expertise, and FinTechs offering agility,
speed to market and a fresh take on customer-centricity. By working
together and taking advantage of APIs, banks and FinTechs can leverage
their complementary strengths, enhancing the customer experience much
more than each entity could do on its own.

We work with clients every day who tell us that they are looking to
better understand the roles they should play as these new business
models take shape; everything from the investment necessary to how to
engage with these new players. Many understand that Open Banking is the
new normal, but they are still unclear about how to proceed,”
Bose. “We are helping our clients see first-hand just how Open
Banking opportunities are improving their product portfolio and
distribution networks, as well as creating new revenue streams, while
minimizing the risk of customer disintermediation.”

FinTechs Earning Higher Marks in Customer Experience and
Collaboration is Key

FinTech companies have done a good job of cracking the code on what
customers want, which presents a threat to bank-customer relationships,
the report found. BigTech companies like Amazon, Apple and Facebook are
conditioning customers to expect more from their banks and the
experience they provide. Because of this, customers are embracing
FinTechs, with 40.3 percent saying they deliver a positive experience,
compared to 37.1 percent who say banks do. FinTechs are most popular in
North America, where 57.8 percent of customers say they offer a positive
experience, compared to 49.5 percent who cite banks. Globally, customers
who are young and tech-savvy are the most likely to turn to FinTechs.

APIs make it easier to create innovative and valuable customer
experiences by pooling the collective tribal knowledge of banks and
FinTechs. Challenges to Open Banking development include the need for
governance and consistent technology standards. Additionally, banks must
determine their role in Open Banking, how to effectively personalize
customer data, and how to prepare for new revenue opportunities.

The World Retail Banking Report 2017 Methodology

This year’s World Retail Banking Report explores how APIs foster
business and technology outcomes that enable productive collaboration
among diverse stakeholders. It features data from a global survey and
interviews with senior executives from 126 banks and FinTechs.

For more information visit

About Capgemini

With more than 190,000 people, Capgemini is present in over 40 countries
and celebrates its 50th Anniversary year in 2017. A global
leader in consulting, technology and outsourcing services, the Group
reported 2016 global revenues of EUR 12.5 billion. Together with its
clients, Capgemini creates and delivers business, technology and digital
solutions that fit their needs, enabling them to achieve innovation and
competitiveness. A deeply multicultural organization, Capgemini has
developed its own way of working, the
Collaborative Business ExperienceTM
, and draws on Rightshore®,
its worldwide delivery model.

Learn more about us at

Rightshore® is a trademark belonging to

Capgemini’s Financial Services Business Unit offers global banks,
capital markets firms, and insurers transformative business and IT
solutions to help them nimbly respond to industry disruptions, to give
their customers differentiated value, and to expand their revenue
streams. A team of more than 55,000 professionals collaboratively
delivers a holistic framework across technologies and geographies, from
infrastructure to applications, to provide tailored solutions to 1000+
clients, representing two-thirds of the world’s largest financial
institutions. Client engagements are built on bar-setting expertise,
fresh market insights and more than a quarter century of global delivery

Learn more at

About Efma

A global non-profit organisation, established in 1971 by banks and
insurance companies, Efma facilitates networking between
decision-makers. It provides quality insights to help banks and
insurance companies make the right decisions to foster innovation and
drive their transformation. Over 3,300 brands in 130 countries are Efma

Headquarters in Paris. Offices in London, Brussels, Barcelona,
Stockholm, Bratislava, Dubai, Mumbai and Singapore.



1 Open Banking enables third parties to develop new products
and services through use of APIs.
2 Disintermediation is
the elimination of financial intermediaries (banks, brokers, financial
institutions) between the suppliers of funds (savers/investors) and the
users of the funds (borrowers/investees).
3 Application
Programming Interfaces (APIs) facilitate information flow and
collaboration between the parties of a connected technology ecosystem.


North America
Benjamin Pfeffer, +1
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Singh, +33 1 47 42 6771