While dealing with regulations and ever-present concerns over security, the global financial services ecosystem is in the mood for innovation. Traditional banks, fintech firms and investment platforms are finding ways to reinvent services and satisfy consumer aspirations quickly, whether this involves open banking, blockchain or digital currencies.
This raises a question for enterprises in other sectors, especially those in B2B markets: Can company leaders afford to ignore these developments? Let’s take a closer look.
1. Open Banking: Watch Closely
With open banking, customers can choose to share their personal and financial data with third parties they trust, such as tech startups and online financial services providers. Banks open up their APIs, which creates opportunities for these non-banks to offer apps that provide fast payments, helpful account information and other services.
Currently, the major business opportunity is with consumers, who are attracted to financial services that are more visible, simpler to use and easier to track. In the U.K., over 26 million open banking payments had been made by the end of 2021, an increase of more than 500% in 12 months.
The B2B world has yet to take the plunge in a big way, but open banking offers great promise. Currently, ERP vendors spend a lot of energy creating specific integrations for their enterprise customers to help them deal with different formats, security measures and certificates for each bank. None of these are standardized—but they could be with open banking and readily available APIs. This would free up significant resources for ERP vendors to create more value for their customers.
With open banking, enterprises could achieve greater agility through faster payments, as well as more timely account information, managing cash receivables and payables directly through their ERP. Right now, some exciting proof-of-concept work is underway in this area at my own company, Unit4. Opportunities are also being discussed publicly by the likes of JPMorgan and the global financial group BBVA.
However, it’s not yet clear how the financial model could work out for banks and businesses. Watch this space.
Continue reading: https://www.forbes.com/sites/forbestechcouncil/2022/08/16/how-ready-are-enterprises-for-open-banking-blockchain-and-digital-currencies/?sh=16f8f1b2fcc5
This raises a question for enterprises in other sectors, especially those in B2B markets: Can company leaders afford to ignore these developments? Let’s take a closer look.
1. Open Banking: Watch Closely
With open banking, customers can choose to share their personal and financial data with third parties they trust, such as tech startups and online financial services providers. Banks open up their APIs, which creates opportunities for these non-banks to offer apps that provide fast payments, helpful account information and other services.
Currently, the major business opportunity is with consumers, who are attracted to financial services that are more visible, simpler to use and easier to track. In the U.K., over 26 million open banking payments had been made by the end of 2021, an increase of more than 500% in 12 months.
The B2B world has yet to take the plunge in a big way, but open banking offers great promise. Currently, ERP vendors spend a lot of energy creating specific integrations for their enterprise customers to help them deal with different formats, security measures and certificates for each bank. None of these are standardized—but they could be with open banking and readily available APIs. This would free up significant resources for ERP vendors to create more value for their customers.
With open banking, enterprises could achieve greater agility through faster payments, as well as more timely account information, managing cash receivables and payables directly through their ERP. Right now, some exciting proof-of-concept work is underway in this area at my own company, Unit4. Opportunities are also being discussed publicly by the likes of JPMorgan and the global financial group BBVA.
However, it’s not yet clear how the financial model could work out for banks and businesses. Watch this space.
Continue reading: https://www.forbes.com/sites/forbestechcouncil/2022/08/16/how-ready-are-enterprises-for-open-banking-blockchain-and-digital-currencies/?sh=16f8f1b2fcc5
