True innovation beats regulation any day. I am concerned though that for large organisations they only innovate because they have been regulated to do so – the best example being GDPR and the Payment Services Directive (PSD2) in the UK.
I have covered the General Data Protection Regulations mandated by the EU in other posts. The PSD in the UK essentially forces banks to be able to communicate information they hold on clients via APIs in an open banking environment.
I’ve had the opportunity to ask two senior executives of the largest UK banks if they would have built an open banking architecture if they hadn’t been forced to buy relation an in each case they said no.
It was interesting to read in the Financial Times that HSBC is seeking to poach customers from rivals with an app that aggregates bank accounts, as the looming regulation threatens to weaken established lenders’ customer relationships.
I wonder once the open banking initiatives are live in 2018, if large banks will dedicate teams to build smart services on top of this.
One of the best positioned would have to be Barclays, who thought their Rise studios globally are getting a first look at the best and brightest FinTech companies.
The trick will be if a large bank can truly be agile – and perhaps having an open banking platform will be the catalyst.
This poses a challenge to other industries – can you open your data platforms without having being told to by the regulator? Can you innovate without having to regulate?