Open Banking White Paper – The Future of Collaboration in Corporate Banking
According to a survey, 90% of bankers are convinced that open banking can increase the organic growth of banks by 10%[1]. A global banking survey also found that 86% of banks plan to use open APIs in the next 12 months to enable open banking capabilities[2]. To address this development and better understand the opportunities and implications of the trend towards opening up a banks’ own IT infrastructure, the Business Engineering Institute and Commerzbank have jointly authored an open banking white paper on the future of corporate banking collaboration. In this white paper, we explored the overarching questions of what the open banking concept is all about and how it will change value creation, particularly in corporate banking. For us, open banking is a far-reaching concept that includes not only the technical aspect of how different IT systems communicate via APIs, but also cultural aspects such as an open way of thinking and a culture of trust. We consider this to be an immediate success factor, as it promotes cooperation with specialized partners on an equal footing in order to develop innovative solutions that directly increase customer value. Collaboration and co-innovation are key factors and only by combining the right resources and know-how across company boundaries are players able to create innovative and more holistic solutions for their customers. It is important to understand that open banking is not just another platform model, but includes very different strategic, organizational and technical aspects, and that additional customer value is created through the collaboration of relevant parties. This is possible by drawing on existing skills and competencies in the network.
No one can do it all alone
New technical possibilities go hand in hand with new challenges, which especially in today’s complex world can no longer be solved by a single party. A large bank with many years on the market has a wealth of experience and proven technological capabilities (e.g. data handling, technical interfaces and automation), which can be brought to bear in partnerships. The aim is to create the necessary technical basis with the partners, to jointly recognize opportunities and to identify and use the right resources.
Business and corporate customers are part of the equation
During our research we were able to identify three basic needs of corporate clients: “tailor-made products and solutions”, a high “automation and end-to-end integration” and a so-called “hybrid digital-personal relationship”. The existence of a predefined set of products and the right technical tools to deliver them is not sufficient to meet these needs holistically. Satisfying these needs in their entirety requires cooperation, since only the exchange of ideas enables the development of offerings that create additional customer value and go beyond what all actors could have achieved on their own. In addition, a personal relationship and trust continue to be important success factors for building a successful and long-term customer relationship. We believe that solutions should be created and provided in close cooperation with the customer. The customer as well as other partners (e.g. FinTechs) are an important part of the equation.
Cooperation is the key to success
Ultimately, we see that the world is heading for much closer cooperation and collaboration. Value is rarely created by one party alone. Moreover, even the best idea alone is often not enough, because the right resources, know-how and perseverance for successful implementation must also be available. We see a future in which organizations communicate and collaborate much more openly. Each party contributes unique capabilities, and when the strengths of all parties are combined, the potential for innovative solutions is virtually unlimited. McKinsey & Company estimate that cross-organizational and cross-industry collaboration will generate $60 trillion in value by 2025[3]. FinTechs are known for having been often viewed as a threat by established banks in the past. Now, however, both parties have recognized that there is great potential in collaboration. Only the combination of their capabilities will lead to increased customer value and the focus should always be on this.
Are you curious to know how the concept of open banking is changing collaboration in corporate banking? If so, you can download the complete white paper at:
https://developer.commerzbank.com/whitepaper
[1] Accenture. 2018. The brave new world of Open Banking.
[2] Finastra. 2020. Open Banking and collaboration: State of the nation survey 2020.
[3] McKinsey. 2017. Competing in a world of sectors without borders.
- Core Banking Radar – «From Modularbank to Tuum – a core banking system that’s not only for banks» - 09.12.2021
- Open Banking White Paper – The Future of Collaboration in Corporate Banking - 13.10.2020
- Free Webinar: Investing in Tokenized Assets – Emergence of a New Assets Class for Asset Managers - 15.05.2020