In today’s digital world, we don’t need to tell you that data is becoming increasingly important. “The new oil”, anyone?
So, it’s no surprise then that, as data becomes increasingly valuable, so too has the concept of this information being available to anyone at any time. Or Open Data as it’s called.
This has been described by The Open Definition as “data that can be freely used, re-used and redistributed by anyone.”
Take government, for example. We can go online and immediately find data on spending by government bodies, social care inspections, or information on UK house prices. Citizens want to know this information for accountability and transparency, while data can help inform better policy-making and continuous improvement of services.
But outside government, one of the biggest sectors to adopt the concept of Open Data today is the financial industry.
Just as the democratisation of data brought data out from the control of IT and enabled the business to derive value from it, Open Banking is the directive for banks to provide customers options to share their financial information with third party organisations.
You might ask why customers would agree to share such personal financial information? It surely seems to conflict with the major concerns around data privacy?
But this is about choice. That’s important. It is about opening up opportunities for customers to receive improved service and custom solutions.
In other words, to borrow easily, save effectively and pay without pain. When customers’ data is locked within financial institutions, there is a lack of choice from the marketplace.
From the technology used and data generated through day-to-day financial transactions, an increasing volume of data has invaluable insights. The rise of ‘challenger banks’ has, indeed, shown consumers the options that they can have.
The issues facing financial services institutions today is driven by the need to change from the traditional model of developing products to sell to customers to a focus on solving problems.
Customers do not want to buy a mortgage, they want to buy a home. People do not want to buy an investment fund, they want to manage their money more wisely.
As a result, in banking, as with many other industries, there is a major shift towards understanding customers, improving the ability to recognise and respond to what makes them happy.
And it is easy to see why. Acquisition costs for new customers is significant; to lose customers is not only a loss of future revenue, it is also a gain for a competitor.
The Open Banking directive has been primarily focused on Europe and it’s fair to say it has been causing a lot of excitement and debate of late.
Organisations that act quickly and centre themselves within this new competitive marketplace will be developing the solutions relevant to customer experience- and they are the ones that ultimately will be successful.
To find out more about how Automated Intelligence can uncover the value in your data to enable successful Open Banking, visit the team on stand at the Open Banking - A Blueprint for the Digital Economy? Conference on 28th October. Visit www.automated-intelligence.com for more information.