RBS, HSBC and Nationwide predict shift towards 'banking as a platform' through open APIs

Scott Carey

Perkins from Klarna said: "You don't know what is going to happen when these APIs are opened up. Banks will innovate themselves, they might innovate on other bank's platforms and of course fintechs will be there as well.

"When these APIs are opened up, in the way Mint.com has done in the USA, is the ability for third parties to be the front end for all of your bank accounts. At the moment that's just not possible."

Christoph Chauzot, group head of innovation at HSBC wouldn't be drawn on specifics but he did say: "In terms of the opportunities that we see, there is AI, data, digital identity, APIs."

Nationwide's Matt Cox is more bullish: "If you accept the fact that the kind of services you will have to offer customers in the future will require you to work with a broader set of organisations, yes fintechs included, then you are going to need a way of opening up your services to work more readily with them."

Data sovereignty

Cox said that this approach does raise some interesting questions around customer data which will have to be assessed. "In a world where the data is freely available and the consumer chooses where to do their digital banking, this raises some interesting questions around accountability [] This is something we will have to decide upon collectively as an industry."

Mondo has exposed its APIs to third parties since February. Chief technology officer Jonas Huckestein wrote in a blog post: "We'll allow developers to build applications that can request access to other customers' data on an individual basis, using OAuth 2.0. For example, in the future you could make an accounting app that connects to Mondo and customers could authorise you to access their account to extract their expenses."

Huckestein is similarly aware of potential issues around data though, writing: "There are several important questions around data security and privacy that need to be answered before we can allow developers to publish apps that can access other people's data."

What next for the banks?

Klarna's Perkins said: "Consumers and banks having a one-to-one relationship will go away in favour of a one-to-many relationship. I think the banks that remain will essentially be platforms similar to how ISPs [internet service providers] are for the internet now. Basically it operates in the background, it works and the trust is there [] The customer experience will be over the top of things."

Stephen Lemon, co-founder of the British payments startup Currency Cloud sees consumers becoming "provider agnostic at a bank level." He says: "You will see a move towards re-bundling, where individuals can pick and choose services from the individual providers."

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