A recent white paper from the Swiss Fintech Innovations Association (SFTI) on multibanking resonated with us at CREALOGIX. The topics covered are very close to our own mission, including fostering innovation, improving the customer experience and delivering on the promise and opportunity of open banking concepts. We took a closer look at some of the concerns around this topic and considered how technology can acknowledge and address these concerns.
Does multibanking mean the loss of a customer interface?
This is an understandable concern – for individuals and businesses, multibanking is a very convenient way to view a complete financial picture across all accounts from a single dashboard but banks fear the lack of engagement if customers use their competitor’s platform instead of their own. However, the problem here isn’t really about possible loss of a customer touchpoint, it’s about what this touchpoint is worth today. Banks with a comprehensive picture of their customers’ needs, which includes systematic data collection, analytics and interpretation and proactive product offerings are making the most of a direct customer interface and will further thrive in this new environment. Those banks that do not use the available data to understand the behaviour of their customers and do not offer relevant products to them – be it a better mortgage offering, a savings account for a new-born or goal-based investments to secure a certain lifestyle – will hardly notice an impact coming from the fact that a customer initiates their payments from an external interface.
Regardless of how a customer accesses their account, proactive and purposeful collection of data to understand customers can be used to offer solutions based on their perceived needs and activity and this will maintain engagement. Technology has a role to play here, and it’s why we have developed a flexible front-end solution that offers third party integration for analytics and user journey tracking. The more banks know about their customers, the more able they are to build a positive and mutually beneficial relationship and this will eliminate any potential threat from the arrival of multibanking.
Won’t other financial institutions be able to use our customer data to offer their services?
It’s worth noting that the data does not belong to the bank, it belongs to the customer. This is an important principle to remember when considering this issue. In the EU, regulatory measures such as GDPR and PSD2 have enforced this idea. In other countries, the picture is not quite so clear. For example, in Switzerland the government currently accepts a more market-driven approach, but this may change if the market remains passive and customers appear to be missing out.
In countries where there is no regulation on data protection, a bank can prevent certain financial institutions from accessing data without consent either by using encryption or using contractual measures. However, this approach may not be the best in the long term. Our recent work with SMEs suggests that multibanking is very important, which means customers may simply move to a different provider if they cannot access these services. Our solutions include customer consent management tools and security mechanisms for access management. This means that even with multibanking services that open up some data to other providers, banks can still have control of what these providers can access. This can also benefit customers because it keeps their data secure and puts them in full control of their data.
How do we get started with multibanking?
This is an area that is causing a lot of debate and excitement at CREALOGIX because it’s an excellent example of how technology innovation can benefit banks and their customers. We recently surveyed SMEs and banks about their plans for the future and it’s clear there is an appetite for embracing these new developments in financial services. Our work in developing solutions for multibanking is just one of the ways we work with financial institutions to help them embrace the opportunity of innovation and deliver premium digital banking services. The technology and solutions we have developed to support open banking is just the start. The real innovation comes when we work closely with our customers to understand how they want to put open banking into practice with specific use cases. This close collaboration and the combination of expertise and technology delivers all the missing pieces for a successful implementation.