Open Banking – towards unified banking and a smooth end-user experience

Now, more than ever, the client has become the main focus of the financial industry. Open Banking can provide the means and the opportunity for banks to redesign their products and services with the end-user experience in mind. The Paypers discussed with Marko Wenthin about the possibilities and changes that Open Banking could bring, both for the banking industry and for the end-user

What does Open banking & API mean for end-users and what will eventually change for them?

For the end-user, Open Banking and APIs provisions and changes are not important. Our job should be to deliver a superb customer experience and we can do this with the APIs. If we take, Uber, for example, the end-user, when using the application, is not interested in the technology behind it. All that counts is the user experience, the fact that you book a car, choose a destination and pay the fare, conveniently, through a single app.  There are many APIs behind these functionalities that ensure a superb customer experience. With open APIs, we see something similar for banking – a focus on the end-user experience. 

Can you give us an example of a superb user experience for the banking industry, as well? 

Well this is the point – there aren’t too many yet, but we can expect more to come. We call this contextual banking, where the actual banking disappears in the consumer’s life. To give an example, WeChat is an application that incorporates, to a certain extent, a banking feature, a payment feature and a credit feature, all embedded in a completely different thing like a messenger service. This is a great explanation of what open API really means. It allows different functionalities to run in the background, keeping them invisible to us, the end-users, and make our lives easier by bringing a better customer experience. 

Do you think that a great customer experience, provided by a killer app, will convince customers to switch from their incumbent banks to digital challengers? 

I do not think that this switch is determined by a killer app, regardless of what end-user experience it provides. The context is what truly matters. It is not like today I’m banking with Deutsche Bank and tomorrow with N26, but rather that I would use different providers of financial services because they meet my current needs.  For example, if I want to buy a car, I would go to someone who could finance my purchase. This does not mean that I have to switch banks. I am simply using more financial services that make sense for my situation and these services can be also be provided by someone, who’s not necessarily coming from the banking industry. 

The question – why should I switch? – is not really the one that matters. I rather think that in the future two sorts of financial platforms will be important: one type of platform, which enables other companies to offer financial services – such as solarisBank – and the other type of platform being aggregators, that connect your whole financial life, so it doesn’t matter anymore who’s providing your current account or your fixed-term deposit. You bring all of them together on one platform. This is also one area where PSD2 steps in and enables the development of these kinds of companies.

How does the job profile of a banking executive change when banks make the transition to open banking?

I believe that the first thing you have to do is open up completely and look at who you are actually serving – it is not the company, but the customer. Without the customer, nobody pays the company and, in return, the company will not be able to pay you. 

When it comes to executives in the banking industry, we see a change in attitude. More and more professionals understand that the world is changing. Technology is changing, the way we behave, how we communicate, how we invest, how we pay – all of these are changing and decision makers need to adapt to keep up and be successful. Someone who fights against digitalization, against innovation is simply standing still, which in a fast moving environment means going backwards. 

Another important point to keep in mind, is that we, at solarisBank, are not the innovators – we are simply providing a platform that offers innovators the environment and enables them to develop their projects. As enablers, we are just using the crowd intelligence, crowd innovation to sustain these changes. 

We have seen Klarna, Adyen get banking licenses – do you expect new entrants coming into the banking markets?

Totally! We actually had a similar discussion at Money 20/20 Europe, about how a couple of traditional banks are disappearing and how we see many entrants coming from outside the banking industry and many of these are not even fintechs. We witness the entrance of new players who, two years ago, had almost nothing to do with financial services. 

We do not want to replace a bank, but to offer different provisions of financial services and these can come from many different players, with or without a banking license. As more and more companies enter the market, we expect a fiercer competition in the banking industry itself and hopefully, this will determine many traditional banks to innovate. 

About Marko Wenthin:

Marko Wenthin is co-founder, board member and the Chief Commercial Officer of solarisBank, a banking platform empowering finance pioneers. Previously, Marko was the Managing Director of Deutsche Handelsbank, specializing in lending to internet companies and providing payment solutions to both on and offline businesses. Marko was also the CEO and founder of GroupPlatina GmbH where he created Sofort Bank, the banking sister of sofortueberweisung.de – Germany’s largest e-commerce payment provider. Prior to this, Marko was the COO and a board member of Deutsche Bank PBC S.A ,Poland and worked for Deutsche Bank in Argentina.

About solarisBank:

solarisBank AG is a banking platform with a full banking license, allowing companies to offer their own financial products. Partners can access the solarisBank modules in the field of payment and e-money, lending and digital banking as well as services from third-party providers integrated on the platform via API. Thus, solarisBank creates a technologically highly developed and regulatory sound banking ecosystem for fintechs, established digital companies and also banks.