Demystifying Open Banking

What it means for bankers and banks 2018

With Open Banking regulations coming into force in jurisdictions around the world, including last week in Australia, it’s important that Australian bankers understand what it means for them. Is it really going to challenge incumbents the way some say, and make certain business models obsolete? What do people mean when they refer to the 'API economy', PSD2 and GDPR? And what are ‘RESTful APIs’ anyway? Most importantly, why should such things matter for bankers who don’t work in payments or technology and perhaps find the language of Open Banking inaccessible and intimidating?

In our report, we seek to demystify all this and more. Open Banking is more than just a new set of compliance requirements, and it will require much more than just new technology. It will affect almost everyone working in banking today, and every banker has a role to play in its evolution in Australia. Most importantly, while we don’t subscribe to the view that banking will be turned on its head overnight, we believe that it will have profound implications for every part of the industry, and that organisations have a list of things to start doing today.


Download: Demystifying Open Banking

Open Banking 101

To help unpack the language of Open Banking, download our 101 guide.

Download: Open Banking 101


1. More than just a new compliance exercise: Open Banking will transform the industry

However it’s done, unbundling and recombining bank services creates the possibility of entirely new business models. Broadly speaking, we see four models emerging in this landscape, including:

  • Customer experience master
  • Infrastructure master
  • Product master
  • Traditional

While, these aren’t entirely new models, Open Banking provides a pathway to digital enablement which wasn’t as open before.

2. Not just for technologists: there’s a role for everyone

In short, everyone has a role to play in a world of Open Banking and in the path to getting there.  In getting ready for Open Banking, here’s how every layer of the organisation can get involved.

Customer relationship layer: Understand unmet customer needs, identify opportunities for key services through new channels, or new services through own channels, and translate implications for customer journeys.

Manufacturing and delivery layer: Develop product / service syndication strategy, and cultivate partnerships and channels for collaboration to satisfy unmet customer needs. 

Operations layer: Identify opportunities for key services through new channels, or new services through own channels, and meet security, privacy and other requirements and expectations. 

Technology layer: Develop and maintain APIs, Software Development Kits and rails into third-party service platforms, and meet security, privacy and other requirements and expectations.

Support layer: Re-orient risk and compliance frameworks, guide choices about value proposition and way to play, ensure required skill and capability mix in human capital, and align contractual arrangements to new risks and opportunities with legal.

3. Walk-Run-Fly: get started today?

As mentioned above, while it is not cause for alarm, we don’t think a ‘wait and see’ approach to Open Banking anchored on merely complying with requirements is wise either. We think a ‘Walk Run Fly’ approach is a practical place to start. Actions banks can take today that they won’t regret doing include:

  • Readying the digital and data engine
  • Strengthening security and governance mechanisms
  • Clarifying strategic opportunities and pathways for growth 

Contact us

Colin Heath

Colin Heath

Leader - Banking and Capital Markets, PwC Australia

Tel: +61 3 8603 0137

Sam Garland

Sam Garland

Banking & Capital Markets Partner, PwC Australia

Tel: +61 3 8603 0639

Jim Christodouleas

Jim Christodouleas

Banking & Capital Markets Director, PwC Australia

Tel: +61 3 8603 2065

Kate Bennett-Eriksson

Kate Bennett-Eriksson

Digital and Experience Partner, PwC Australia

Tel: 61 (0)3 8603 0128

Alex Acworth

Alex Acworth

Director, PwC Australia

Tel: +61 2 8266 4672

Alfredo Martinez

Alfredo Martinez

Banking and Capital Markets, Partner, PwC Australia

Tel: +61 (2) 8266 5296

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