Paige McNamee - Senior Reporter, Finextra

2022 has seen a surge in dialogue surrounding the purported value or objective of Open Banking, and whether this has been realised in the UK. While the debate has stoked critical thinking around what we should hope to achieve through Open Banking, there persist large questions around the potential benefits that remain on the table – particularly for incumbent banks.

The financial institutions that approach Open Banking capabilities with an open mind, rather than undergoing the process as a matter of compliance or tick-box exercise, are better positioned to leverage new opportunities.

While the CMA9 have met the same requirements and have funded the development of UK technical standards and infrastructure for the benefit of the wider industry, explains Hetal Popat, director of Open Banking, HSBC, “the services enabled by PSD2 are only the start.”

“Open Banking in its broadest sense should extend beyond this regulatory starting point and offer a range of extensions that will unlock wider benefits,” Popat argues. For example, Open Banking payments can be enhanced to make them better suited to merchant needs both in physical and e-commerce use cases. Similarly, Open Banking data sets can be extended to non-banking data such as accounting information that will simplify the financial lives of SME customers.

Sahana Hussain, HSBC’s global head of Open Banking technology, agrees that there remains a huge opportunity for the CMA9 banks to leverage the regulatory Open Banking platform, invest in the API economy and build ‘API-as-a-channel’ that will enable banks to deliver value, improve customer experience and provide flexibility to customers to make informed financial decisions.

This article was first published in full on Finextra.com on 25 April 2022.

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