For many years, the greatest changes in production sectors have not been found in technology or in the use of digital channels. These are merely tools and supports for the real economic transformation: the concept known as ‘as a service’. Whether it be services provided to end consumers or providers acting as intermediaries, businesses are redefining themselves, providing a product on a sort of ‘permanent rental’ basis and allowing customers to enjoy goods without actually owning them. This, of course, is something that has been enabled by digital environments and their extended reach.
Obviously, this was certain to affect an industry as strategic as the banking sector. The concept of “Bank as a Service” (BaaS) was the inevitable next step as consumers become more and more digital and streetwise about the tools they use. Recently, Finastra published a detailed report about the evolution of banking towards BaaS and further towards the total opening up of financial services
. We have now moved from Open Banking to Open Finance.
In the report’s executive summary, the authors point out “these initiatives have already started ‘paving’ the journey” towards the development and enhancement of the “services financial institutions are able to provide to their customers”. They also believe that this is not something that is likely to slow down “despite continued widespread agreement that current global regulatory frameworks are hindering innovation”.
“With the world adapting to a new normal and a likely ‘hybrid’ way of working for many organisations in the future”, the research considers that the “collaboration” between institutions will continue to be “important” when it comes to offering financial services. Otherwise, it will be impossible to overcome the “several existing and new barriers surrounding regulation, security and technology”.
At GDS Modellica, we have decided to pick out some of the more relevant insights from this report and present them to you in our usual way: an infographic. This way, you can easily see in detail for this future of open banking and open finances may well look like.