BANKING ECOSYSTEMS
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Five years on from the revised Payment Services Directive ( PSD2 ) – the regulatory framework that started an era of open banking across Europe , and a marketled push proliferating data sharing at banks in the US and Europe , among other jurisdictions – innovation in the sector has started to bear fruit .
Notably , open banking has laid the foundations for banks to create , or join , partnered ecosystems – a network of financial providers offering a one-stop-shop for all customers ’ financial services needs including lending , payments , investments and insurance .
It is in this way that financial ecosystems play into the core tenet of open banking , shifting focus from the product to the customer and promoting convenience , choice and efficiency . With each specialised provider contributing its expertise through APIs – be it a bank , fintech or insurer – data can be securely and functionally exchanged to enable a single entity within the ecosystem to offer the services of its partners .
For example , “ a customer could access their bank account , apply for a loan from a different provider , and invest in financial markets through another specialised entity – all within a unified ecosystem ,” says Seshika Fernando , VP , Head of Banking and Financial Services at WSO2 .
Yet , while the revenue-boosting possibilities for ecosystem partners are seemingly obvious , less than a third of the world ’ s biggest banks are meaningfully investing in banking ecosystems at present , according to a study by Boston Consulting Group ’ s Henderson Institute . In fact , the same study suggests nearly a quarter of large global banks are not investing in ecosystem models at all . fintechmagazine . com 49