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CoverStory

ACI Worldwide's 2018 Global Payments Insight
Survey: Retail Banking offered similar insights.
Open banking, which facilitates It found a willingness among 73 percent of
banks to open up their APIs to third-party
consumer-authorized sharing of bank developers. Mark Ranta, Head of Digital
Banking Solutions at ACI, noted there are
account information with nonbanks, is "different levels of openness. … I think what
well underway in the U.K. and European you'll see in the U.S. is less of a willingness to
be completely open."
Union. Will the U.S. Barclays Bank was the first global bank to
market embrace it? divulge plans to bring open banking to the U.S.
market. Barclays disclosed in April 2018 that
it was partnering with PayPal Inc. to enable
customers of the two behemoths in both the
Both initiatives are expected to provide more competitive United States and the U.K. to easily manage
options for banking and payments in those markets. money and make payments across account platforms.

"Though PSD2 and open banking are chiefly viewed as "The U.S. and the U.K. are our two biggest markets,
regulatory requirements, they represent a significant where we share millions of customers with Barclays,"
opportunity for banks to partner with trusted third- Gary Marino, PayPal's Chief Commercial Officer, said in
party providers to integrate financial services into their a statement. Ashok Vaswani, Barclays U.K. CEO, added,
customers' everyday lives, while also driving more "Barclays is becoming a digital company and I believe
innovation inside the banks," said Ken Paterson, Vice this strategic partnership with PayPal will provide the
President of Special Projects at Mercator Advisory Group. first of many new developments in which we join up with
partners to enhance digital journeys."
Imran Gulamhuseinwala said this is "a major step toward
giving the customer real ownership and control of their Mastercard, meanwhile, made a significant move toward
finances and data. Gulamhuseinwala is Trustee of the open banking with its 2017 purchase of U.K.-based
U.K.'s Open Banking Implementation Entity (OBIE). Vocalink. Vocalink runs the technology that underlies
real-time payment systems in the U.K., Singapore and the
PSD2 is "another step towards a digital single market in the system launched in 2017 by The Clearing House, based in
EU," said Valdis Dombrovskis, Vice President for Financial New York. "We have the opportunity to extend everything
Stability, Financial Services and Capital Markets at the that we've accomplished with cards to bank account-
European Commission. "It will promote the development based payments and redraw the lines of what's possible
of innovative online and mobile payments, which will in commerce," Michael Miebach, Mastercard's Chief
benefit the economy and growth." Product Officer said in heralding regulatory approval of
the acquisition.
Banks see opportunities
Banking technology firms are in the game, too. ACI has
The opportunities presented by open banking have not been promoting its portfolio of solutions for support of
been lost on large global banks. Bankers worldwide are open banking strategies, and in May 2018 it revealed that
readying their institutions for an open banking future, a large Hungarian bank, Erste Bank Hungary, had signed
said Alan McIntyre, Senior Managing Director for an agreement to implement those solutions. In April,
Banking at Accenture. In fact, all but one of the executives Fiserv introduced FinKit for Open Banking. That solution
at global banks surveyed last year by Accenture said their includes access to pre-built PSD2 and open banking APIs,
banks were planning major investments in open banking and supports ongoing compliance through API version
by 2020, McIntyre stated. Sixty-six percent indicated they control, release management and distribution, Fiserv said.
expect open banking to help create new revenue streams;
90 percent expect it to drive incremental revenue grow of Fraud and other risks
up to 10 percent.
The path to open banking offers new opportunities, but
"Unlike banks in Europe where it is mandated by it also presents perils. For example, it "puts banks at risk
regulation, those in North America and Asia Pacific of becoming back-end transactional players, with their
have the luxury of deciding if, how and when they will products and brands buried deep in another transaction,"
implement open banking, and we expect many will do so said McIntyre. Inherent risks also come with broadening
as a way to more easily offer integrated financial services access to bank accounts by customer-approved nonbanks.
to customers," McIntyre said. "The big question is whether consumers will be willing to
share their financial data with outside companies which

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