CoreLogic head of global technology, Greg Dickson, explores how a revolution in data ownership is sowing the seeds for platform banking and the AI broke
Across the wester world, regulators are pushing banks to open up access to customer data to give the consumer greater control. With the Competition and Markets Authority changes for the top nine banks in the UK, PSD2 in Europe, discussions driven by the Consumer Financial Protection Bureau
in the USA and Australia’s open banking review, it won’t be long before the concept of ownership of the customer and their data becomes last century.
Instead, customers will be able to control who has access to their data, ranging from a complete list of all transactions, to their salary history, their loan and utility payments data. They will also be able to choose which financial providers, bureaus, and fintechs are allowed to see their data and offer them services. This is much more profound than even positive credit reporting – it combines fine-grained earnings and affordability data with customers’ repayment histories and lifestyle spending.
In the tech world, the most successful businesses are platforms – the value of Apple’s App Store and devices lies in the number of third-party apps they host; the platform ecosystem becomes more valuable the more others build in it.
The same principle applies to the other technology giants, like Amazon, Microsoft, Google, Twitter and Facebook. Their platforms are built through extending their services with open application interfaces, which enable them to work with partners. For example, I can tweet an article from inside LinkedIn, or sign into a website using my Facebook credentials, or order an Uber from inside Google Maps.
With open data, banks are looking at ways to embrace platform thinking in order to stay relevant. Rather than allowing others to disrupt them by using the customer data they store, many are looking to create platform ecosystems in which fintechs and other service providers can seamlessly interact using customer data as customers opt them into it. In Australia, Macquarie has already announced that an open-banking platform will launch soon.
When banks become open-data platforms, the world of broking will be impacted by both opportunities and threats. Opportunities include far easier access to customer data and the associated ability to rapidly deal with paperwork; leads for new business made available through the platform ecosystem; and the ability to add on additional services that meet customers’ needs, for example insurance.
Threats include the enhanced ability for AI and machine learning technologies to learn about customers and make offers to them through digital brokerages; existing digital offerings accelerating their customer acquisition with more data and ease of use; and more rapid integration to unified service offerings, such as combined property listings and brokerage portals.
To prepare, brokerages need to have access to good tools that are ready to integrate with banking platforms, and can help them scale out across new ecosystems and use new data. Brokers should also keep an eye on what is happening in the UK and what this means for Australia.
Above all, a focus on customer service – and through service retaining and growing relationships with customers – will help, regardless of the impact of new open-banking platforms.
