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Monitise FINkit reveals future challenges of open banking

Thursday 27 April 2017 | 11:20 AM CET

Monitise FINkit has announced the key findings from its research into senior banking executives` priorities, challenges, and future plans regarding the open banking revolution.

The study, carried out by independent researchers LM Research, includes responses from 15 major UK banks and other financial institutions. According to the findings, 60% of respondents named regulatory change and the pressure of compliance as the key challenge (with competition 53%, fraud or criminal activity 53%, and Net Promoter Scores 53% also top distractions).

However, despite the regulatory pressure and the CMA’s intentions, only 27% believe Open Banking will improve their business and make it more competitive, and only 13% believe it will allow them to offer their services to customers of other banks.

Competitive threat is seen to be coming from incumbent banks (80%) rather than challengers such as Atom and Monzo or technology businesses such as Amazon or Facebook applying for banking licenses (33%).

Only one-fifth of respondents named outdated and / or failing technology as a key business challenge, with just over two-thirds (67%) seeing their bank as a technical leader. On the flip side, a third agreed that existing technology was the single biggest thing holding them back from executing on innovation, along with internal systems and processes (27%) and a risk-averse culture (20%).

80% of respondents confirmed they are investing more than GBP 25 million into ‘innovation’ every year, with over a quarter (27%) spending more than GBP 100 million. While the majority said they are seeing a return on that investment in terms of PR or planning, only half (53%) said that the innovation team’s work is delivering new services into customers’ hands on a regular basis.

The majority of respondents agreed that digital transformation is critical to the future of the bank (73%), and 47% are working towards a goal of releasing new services at a faster pace in the coming two years. Only 7% of respondents are worrying about hiring the right talent to support that transformation.