In our recent survey of UK bank account customers, we found that only a third of respondents were aware of Open Banking, yet two thirds of the same overall consumer group are keen on the features that Open Banking promises to unlock. This is not as much of a contradiction as it sounds, because it’s just another example of how, as consumers, we have little interest in how banking technology actually works or even what it’s called: we just want simple convenience to make our lives smarter and easier.
So whilst the majority of people haven’t heard of Open Banking there’s no shortage of demand for better integrated payments and personal finance management.
If you are an insider to banking technology, so far Open Banking has probably mainly been a conversation about regulatory compliance and technicalities of public APIs. But to seize the initiative, financial brands need to go beyond merely technical compliance.
The key to this is to consider how to fulfil some real-life use cases from a customer’s point of view. In this article we take a look at some of the main Open Banking use cases we are discussing with our 500+ banking clients globally.
Open Banking use cases – the CREALOGIX Top 10
1. Transfer money instantly between independent bank accounts, credit cards, and savings
This is the most popular idea amongst our survey respondents (2,000 UK consumers): one in three people would like mobile/digital banking features to perform multi-account money movements, and 13% of people would consider changing provider to get this functionality if their current bank account didn’t offer it.
As the early advocates of Open Banking predicted, active payment initiation functions are going to be just as important for consumers as read-only account information services.
2. See all of my different account balances in one dashboard
Aggregation of accounts is the most obvious and widely considered use case for Open Banking. 28% of our survey respondents want to be able to do this in their digital/mobile banking.
We believe, to have an impact, this functionality should be offered by a bank within their main app, rather than requiring a separate or third party app. Its usefulness depends on being able to pull in all of a customer’s accounts including credit cards and savings. The more comprehensive it is, the better for customers.
3. Automatically calculate spending patterns and sweep spare money into savings or investments
22% want this feature and it is a great example of something that customers would love their financial apps to do for them in a simple way.
Under the surface, this will be complicated to implement. We expect to see specialised payments and savings fintechs tackle this one via Open Banking APIs before it becomes more widely implemented within banking apps.
Smart automatic money shifting across accounts also holds a lot of potential for improving how credit is offered. If Open Banking can automatically help you get the best interest rate for savings, people should be even more motivated to get automated suggestions or transfers about saving on credit card, loan, or overdraft interest.
4. Get foreign currencies on demand instead of having to exchange in advance
Some foreign exchange applications still act a bit like travellers’ cheques: you have to convert a chunk of cash up front and then you get stuck with unspent foreign currency at the end of your holiday.
The Open Banking idea here is that you can still use the independent foreign currency services for the best rates (outside your bank or credit card) but you can pull in funds on demand, or maybe even set up automatic rules based on exchange rates. 21% of our survey respondents are interested in this.
5. Grant access to banking data to prove income when applying for a loan or mortgage
Probably one of the most directly profitable use cases from the point of view of banks and other lenders, access to accurate and recent earnings and spending data ought to make credit pricing and risk assessment far easier.
Although commercially-minded access to our personal financial history might set off some privacy alarm bells, almost one in five UK consumers would like to have this feature.
6. Get automatic financial reports that combine all my bank accounts and credit cards into a unified statement
17% of UK consumers would like this kind of convenient consolidated personal financial reporting, and banks could consider it as a way to improve the value of existing statements.
Offering a clearer view of total spending and cashflow would be a major step towards helping people become more financially healthy. All banks could be doing this and it should bring customer loyalty and increased engagement
7. Get reminders and suggestions about better money management from an AI personal financial assistant
All the insights you can get from pulling together the totality of your financial life into one place would be wasted if it was just a few pie charts. 10% of our survey respondents said they would consider switching provider if it meant getting more active and intelligent tips about their spending and saving, enabled by Open Banking data connections.
CREALOGIX recently demoed a banking chatbot to show what can be done by connecting different modules of our Digital Banking Hub.
8. Grant access to banking data to receive automatic suggestions about money saving on bills and insurance
14% of our survey respondents said they would consider switching banking provider if they could get their hands on an Open Banking integration that directly helped them save money on bills.
Automatically detecting current providers from bank transactions could significantly improve convenience and frequency in comparison platforms.
Even more significant is the longer term opportunity Open Banking opens up when you consider non-banking parts of our financial lives that could be connected together. In a separate question of our survey, 27% of UK consumers said they were interested in managing utility bills from within their banking or payments app.
Other popular integration ideas include managing Spotify and Netflix subscriptions, as well as insurance and pensions, from within a banking app.
9. Grant access to banking data to receive a more fair and accurate credit score
This is quite similar to the idea of getting better loan or credit card offers by securely sharing bank transaction data, but suggests a more persistent option in terms of building or updating a score that can be used in lots of scenarios. This is likely to be a popular way for independent personal finance fintechs to monetise aggregated data in a way that customers will be happy to opt into: 10% of our respondents were OK with this idea.
10. Get funds from my bank on demand when trading shares or other investments
Open Banking could be a game changer for online and mobile stockbrokers who are willing to forego the advantage of having customers deposit cash in investment accounts.
If offered an Open Banking payments integration, investors could pull in money instantly and fee-free via Faster Payments, at the time they want to buy shares or funds, just like an ecommerce checkout. That said, I can see this being offered by cryptocurrency and gambling platforms before it sees mainstream adoption in wealth management.
Every innovation checklist should always dial it up to 11, so here’s a big one to consider: bank as identity provider.
In our survey we asked UK consumers the following:
“If you could login to your bank account, and with a few clicks/taps use this as an instant, trusted proof of identity when signing up with a new third-party provider, would you consider using this feature?”
Two thirds of consumers would be interested in using their bank as a digital identity provider on the basis of this description. Gen-Zs and Millennials are twice as likely as over 54s to be comfortable with this idea.
Combined with the deep reserve of trust that established banking brands have among consumers, we believe this demonstrates strong potential for banks playing a much wider role for authentication in our digital lives, thanks to Open Banking.
Open Banking is not some kind of one-time project that financial institutions need to tick off and move on from. It’s actually the start of an entirely new era in banking and payments, with huge implications for the whole financial industry. With all our accounts and apps increasingly networked together, it is likely we are entering a new period of explosive innovation and competition.
As consumers get their hands on the new features made possible by Open Banking integrations, their expectations will rise and financial institutions will need to work even faster to satisfy demand.
This is not just a future hypothesis. As our survey shows, consumer demand already exists now, and will rapidly become a factor in competitiveness and customer loyalty. Over half of our survey respondents reported they cannot get any Open Banking features from their current banking provider right now, and almost half of people surveyed said they would try out a new provider if it offered Open Banking features they wanted.
Talk of market disruption will be no exaggeration, and any banks so far tempted to take a passive attitude towards Open Banking are well advised to rethink that strategy and take a look at what consumers already say they want today.
Open Banking market research
Get the full survey report analysis from CREALOGIX here.
Swiss multinational banking software provider CREALOGIX works with leading global banks and wealth management firms to provide the best digital experience to their customers. Visit crealogix.com to talk to us about how we can help with your Open Banking strategy.