Ian Webster: «Open Banking An Opportunity, Not Threat»
The banking industry's attempts to align «costs to serve» with «value» has led to mistrust amongst customers. If trust is not restored urgently, banks could lose customers under the open banking era dawning on Asia.
The open banking era should be embraced rather than feared.
«It’s an opportunity to join the dots on the customer’s life… how do we make sure that (the relationship) is mutually rewarding?» asks Ian Webster, who was speaking at the Temenos Regional Forum in Singapore on Tuesday.
Webster then cited the example of how ANZ Bank has created a win-win solution for themselves and their client on a particular deal - as part of their investment in an airport, the bank made the airport sign up to an emissions target. If the airport hits the target, the bank will lower the interest rate.
«In the future, if you use electricity more wisely, I will charge you lower rates. Those are the kind of models that we are seeing come to live,» said Webster.
Mistrust Built Over the Decade
Faced with a high volume of transactions but the low-value of such services, banks today face extraordinary cost pressures. This has led many banks to pressure their staff to sell more products, resulting in product mis-selling and sometimes fraud, says Webster, head of banking and financial services at Cognizant.
«How did we get here? Our attempt to align ‹cost to serve› with ‹value› has led to an imbalance,» said Webster.
But Shiny New Toys Aren't Strategies
As most banks already roll out their own mobile apps, the industry is approaching the end of the ‹first wave› of digital adoption. «The shiny new toys syndrome is not a strategy... we need to start thinking about a real breakthrough,» cautioned Webster.
Blockchain may be the latest shiny new toy for banks but it may not really differentiate one bank from another.
Financial Well-Being is Key
Webster suggests that rebuilding trust has to be central to tomorrow's banking solutions. «Should we be in the financial well-being industry? I think we should.»
To restore trust, the industry needs to reconnect with its purpose. «Use our data, our tools, our assets for the benefit of the customer, not the benefit of the bank,» he said.
