Which banks are leading the way in open banking? In a new benchmark by Innopay, BBVA, Deutsche Bank, the National Bank of Greece, DBS and Dutch bunq emerge as the global leaders.
Open banking offers a glimpse into the future of banking. With open banking, bank consumers allow third-party service providers to access their personal financial data. These third parties - often fintech startups offering smart solutions - gain secure, real-time access to bank data using unique codes known as Application Programming Interfaces (APIs).
Open banking offers consumers and service providers several benefits. Consumers can use apps to manage and monitor various accounts, while banking institutions and third-party service providers can use transaction data to tailor services and marketing to individual consumers.
Amsterdam-based consulting firm Innopay specializes in digital transactions, making it an expert on topics such as digital identity, data exchange and open banking. Leveraging this unique expertise, the company publishes a biannual monitor on best practices in the global open banking landscape.
Globally, banks vary widely in their maturity in open banking. Many are still in the early stages of providing access to developer tools and easy access to APIs, while others have managed to develop a comprehensive long-term strategy.
Based on their progress and capacity in open banking, Innopay divides global banks into four quadrants: (1) Starters in opening up, (2) Innovators in functionality, (3) Leaders in experience and (4) Masters in openness. That open banking is still in its infancy is evidenced by the fact that most banks fall within the startup category.
That said, a number of banks around the world do make tremendous progress on various aspects of the open banking ecosystem. Many are developing comprehensive API catalogs that enable a wide range of functionalities. Leaders in this area are Singapore-based OCBC Bank, followed by DBS and ICICI Bank.
Others have collected a large pile of API documentation that provides information on how APIs work and applications. America's Capital One bank leads the way in this regard, followed by ABN AMRO and Deutsche Bank. According to the researchers, some banks appear to excel at developing a widely open banking community, while at the same time building relationships with the parties within it. Deutsche Bank is also in the top three in this area, behind bunq and ahead of BBVA.
Finally, the benchmark highlights a number of banks that are easy for developers to use, thanks to a number of tools at their disposal. The National Bank of Greece came out on top in this category, followed by Nordea and bunq.
Banks in Europe and around the world are thus improving several links in the open banking value chain. According to Innopay, this is a crucial next step for the global banking industry, in which players must navigate a very challenging and disruptive financial landscape in the coming years.
"In our view, with the right open banking strategy, banks will build credibility and gain a foothold in the data economy, which will serve as a springboard to future relevance and new business models," said Mounaim Cortet, Senior Manager at Innopay and co-author of the Open Banking Monitor.
