THINK Week in Review: The “Open Banking” Edition

The potential benefits of open banking include improved customer experience, new revenue streams, and a sustainable service model for underserved markets. While open banking stands to benefit end users as well as to foster innovations and new areas of competition between banks and nonbanks, it is also likely to usher in an entirely new financial services ecosystem, in which banks’ roles may shift markedly. And it's a hot topic:

Open Banking: Opportunity or Dead on Arrival? “The best experiences are the seamless ones. Uber is often cited, with good reason, for using APIs to create a new type of experience for a service, in this case private hire cabs, and fundamentally changing expectations. It left the incumbents playing catch up through a series of poorly thought out, bungled apps.

They miss the point that the digital transformation of the sector is not about having an app. It’s the provision of a highly tailored, personalized service. You can choose to share your ride. You can choose the type of vehicle. You can choose multiple end destinations within a trip. You can share your arrival time. It has been a success precisely because it took a poor experience and used existing technology to make it far better.

Does the average Uber user know about the APIs it uses, or how the app’s back-end works? No. And they definitely don’t care.”

It’s getting harder to tell banks from tech companies. “Making finance more efficient is good, reaching out to customers with technology is good, a big investment bank is probably as well positioned to build banking and trading apps as anyone else. It is just different, though.”

Want to spend the rest of the day catching up on Crypto? You are welcome.

How to banish bad habits from your company. “Bad habits won’t disappear automatically through competition, just like nature doesn’t weed out viruses automatically, but companies can inoculate themselves by building in certain processes. They can identify the source of their troubles, and say, “This is the virus that we’re going to try to get rid of.”

Fascinating: Airbnb and the unintended consequences of ‘Disruption’. “Airbnb was supposed to challenge hotels by letting tourists pay renters. But its platform is unwittingly producing a subsidy of tourists, paid for by nonparticipating urban dwellers, who bear the cost of higher rental prices. Like just about every story these days about revolutionary tech platforms, Airbnb is a story both of democratized access to commerce and the unintended consequences of those democratizing efforts, even when they succeed on their own terms.”

How to build trust with colleagues you rarely see. “Trust is paramount for global teams, but it’s something you can’t force on people.  It’s a feeling that develops in various ways over time. That’s why it’s necessary to understand how different types of trust and knowledge can serve as the essential glue for global teams. This can not only improve teamwork and morale, but can deliver better results for organizations.”