How Open Banking is paving the way for Digital Transformation

Jason Man 3rd April 2018

Open Banking is a concept based on financial transparency that is currently being implemented within the banking industry. It’s driving a considerable amount of work on some of the larger and more established financial organisations.

However, it’s also offering a great opportunity for businesses with the vision to grab the benefits of Digital Transformation. Pushing the right processes to support Open Banking (and other regulations such as GDPR and Mifid II) will surely benefit businesses in dealing with future industry change.

Open Banking is a greenfield project, free – in the most part – from the restraints of legacy infrastructure. Many banks have taken the opportunity to deliver Open Banking to the market using practices (like DevOps) that enable Digital Transformation. In doing this, they’ve enabled their businesses to move faster than they might have been able to in the past.


Open Banking: Key facts

In 2016, the Competition and Markets Authority (CMA) noticed that old, large and established banks weren’t having to compete for customers. This was making it too difficult for newer banks to grow.

Open Banking is part of the fix for this and affects the UK’s nine biggest banks – HSBC, Barclays, RBS, Santander, Bank of Ireland, Allied Irish Bank, Danske, Lloyds and Nationwide. It commits them to sharing customer account information in a secure, standardised way with third parties. This offers customers greater choice and gives emerging banks the chance to offer new products and services, without having to hold an individual’s current account business.

To achieve this the CMA worked together to create an open API standard – namely a combination of code and documentation that anyone can use. As with any new digital project, the system will need to evolve to stay relevant to the needs of banks and their customers.

Open Banking is not a one-time fix. Businesses best able to adopt the needed mind-set to respond and capitalise on changes are the ones leading the race in Open Banking – whilst also leading the race in becoming digitally transformed.

Imran Gulamhuseinwala, Implementation Trustee of Open Banking Limited, says:“It’s going to take a while for us to see really new, very different services [but in the end] it’s going to be revolutionary.”


What are the effects of Open Banking so far?

The deadline for the first phase of Open Banking was 13 January 2018. Some banks hit the deadline with room to spare, while others were granted extensions by the CMA.

It’s clear that the banks that released on or around the deadline have adopted or started to adopt a digital mind-set. Lloyds in particular were well ahead of schedule in their preparations – it’s no coincidence that they won DevOps Team of the Year at the DevOps 2017 Awards.

For consumers, the effect of Open Banking will at first be subtle. For instance, if you have accounts with two different banks, Open Banking can let you see them both at the same time, which in theory makes it easier to manage your money. Or, if you want a loan, you could give the provider one-off access to your income and spending history without handing over your login details.

The HSBC Beta platform currently lets customers add current, savings and mortgage accounts from up to 21 different banks. There’s more to come but it already has new features like the Spend Analysis tool, which analyses spending patterns to help customers make better financial decisions. Other new developments include the Yolt app from ING, and the Curve app and card – a new fintech that consolidates all your cards into one through a single app, made possible through Open Banking.


What does Open Banking mean for the future?

Considering the time it takes for APIs and systems to mature, and for those innovative industry changing apps to emerge, it’s going to be a slow burn for consumers.

Banks, on the other hand, need to act now, using Digital Transformation techniques to implement change faster. Iterations on Open Banking and other regulations (e.g. GDPR, Mifid II) will be much faster to adopt, and change will become easier.

It’s not just compliance. This approach also supports innovation through the adoption of technology in banks (e.g. Face ID, IoT, AI). Most banks understand they can’t afford to continually go down a two to three-year project route. Instead, they are moving towards an engineering-driven approach to software development (like DevOps) that supports both the building of good software quickly and keeping up with changes in the industry.


In short, Digital Transformation techniques are essential to support innovation and change in large banking organisations over the coming years. The adoption process for big banks might take longer than their start-up counterparts, but the impact will be substantial if they get it right.

Let’s see who gets there first. Only time will tell which banks are able to adapt.


At ECS Digital, we help customers deliver better products faster through the adoption of modern software delivery methods. We understand the pain of regulatory compliance, embracing new technology, disruptive competitors, people and skills shortages, and deliver business value through tailored Digital Transformation.

If you’re looking for help accelerating change within your business, get in touch with us here

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