Open Banking and the Quest for New Customer Experiences

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The future is about creating intuitive and engaging customer experiences through Open Banking.

In my previous post “The Force Behind Open Banking,” I highlighted how being customer centric is all about creating connected customer experience ecosystems. Such ecosystems exist because emerging players must transcend industry boundaries—not because they can afford to thanks to new technology, but because it is the only way for them to deliver engaging customer experiences.

In this post, I’ll highlight a few categories in which Open Banking will enable banks—or whoever is willing take on the mantle—to be the orchestrators of these customer experiences.

These use case categories are also the focus of the upcoming Global Open Banking Hackathon, where participants from all over the world will build the foundations for the future of customer experiences. We broadly classified these categories into:

  • Creating new and better digital experiences
  • Evolving new products and revenue models
  • Partnering better with other industries such as retail, insurance, manufacturing, restaurants, and travel
  • Tapping into the sharing and on-demand economy in new ways.

In fact, several use cases that we’ll be tackling in the hackathon cover more than one category. These use cases include, among many others, the ability to:

  1. Allow retailers (and other businesses) to query a wish list stored at a bank to see what coupons they should send to their customers rather than relying on blind campaigns.
  2. Send fitness activity reports from a wearable or fitness center to a service exposed by banks—this can then be rewarded in various ways, either by the bank itself or by other parties.
  3. Create a service that allows merchants to send receipts and warranties to the bank, making it easier for customers to manage this information centrally.
  4. Allow banks to create a loyalty platform service for local merchants and retailers.
  5. Create a chatbot that can examine balances, wish lists, and upcoming bills to determine when a purchase should be made while also finding the best deals from qualified retailers.
  6. Allow financial planning as a family unit.

These are all use cases that go beyond providing access to financial information and products. In addition to the core financial function, these use cases create new customer experiences, new customer engagement models, and even new revenue streams of the future.

And, these are all closer to reality than we think. Consider these examples:

  • Have you ever thought of a drink-as-a-service model? Now a new startup called HipBar allows members to buy their favorite brew and redeem it for single drinks at a business of their choosing. This makes for easy search, better budgeting, better sharing and gifting, and provides the businesses with a new loyalty platform of their own.
  • Clink is an app launched last year that automatically invests a portion of your spending into predefined ETF portfolios. Bank of America launched a similar program almost a decade ago.
  • In a recent development, Amazon Pay Places is allowing customers to pay at retailers using their Amazon account—and we all know how PayPal managed to get incumbent card networks to the negotiating table last year by promoting direct bank payments instead of credit cards.
  • Alfa-Bank in Russia launched a new high yield account (6%) which customers can pay into by working out towards their fitness goals.
  • Paytm launched a unique food wallet, where customers can store and redeem the food vouchers they receive from employers.

The emergence of online banks and lenders that attract customers by offering interest rates that are often two to a hundred times better than traditional products is a sign that product innovation is a necessity. The future is about creating intuitive and engaging experiences that result in transactions—not just financial transactions—that provide great experiences.



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