Designing for Open Banking

Nathan Kinch
Feb 5, 2018 · 9 min read

By now you may have heard about a thing called Open Banking. It’s been heralded as everything and nothing. But what exactly is it and how does it impact how we design?

Before answering those questions, let’s set the stage. This article will start by introducing you to the concept of Open Banking. It’ll then detail how Open Banking has the potential to shift value propositions away from traditional financial services towards more human-centric life services. This is a BIG deal. It’ll then conclude by giving you some practical approaches to designing in this new world, whilst touching on a little topic I never miss; trust.

Let’s get started.

What is Open Banking?

Open Banking can most simply be thought of as a way to give people more control over their money and related financial services. It does this by providing the standards and regulatory environment to enable people to grant different organisations access to their financial data for a specific purpose. Doing this has the potential to increase competition, enable new innovations and give people the opportunity to put their money to better use.

It’s supported by the Second Payment Services Directive (PSD2) and is kind of a big deal in the EU right now.

Plenty has been written about both Open Banking and PSD2, so rather than regurgitating what’s already available, I’d suggest a little reading to give you the context you need.

Image credit: paymentsuk.org.uk

Now that we’ve covered the basic context, let’s look at what matter most; the impact.

What impact might we expect Open Banking to have?

I went to the market to ask key stakeholders within the industry what impact they thought Open Banking and PSD2 might have on both people and organisations. I also asked how they thought these changes might impact the design of new products and services. Here’s what they had to say:

“Whilst those in the industry increasingly see Open Banking as a strategic imperative with it’s potential to transform Financial Services, such potential remains largely unknown to its target audience — everyday banking customers at scale.

What matters to customers is that better banking experiences are being delivered, as they manage their money they want convenience, they want choice and they want control. The opportunity to provide easier payment methods, greater insights, more real-time visibility of spending with contextual offers and services is exactly the focus of new market entrants, FinTech’s, Challenger Banks and tech platforms. Designing customer journeys with identity, authentication and consent are critical components as the api-enabled ecosystem expands.

With both Open Banking in the UK and PSD2 across Europe, we now have laws to open the banking ecosystem to promote competition, foster innovation and regulate new players. Given that greater access to customer accounts raises significant data security concerns, it’s only right that robust security standards and explicit customer consent, combined with strong authentication methods are being specified to ensure confidence in new digital banking services that will soon become mainstream.”

Nick Caley

VP Financial Services and Regulatory — EMEA, ForgeRock

“Open Banking will shift control from institutions to the individual, while CX and HCD focuses on true needs of individuals. So, Open Banking is the perfect catalyst for innovation.

The current wave of FinTechs achieved traction by providing better CX than the incumbents. Open Banking will again disrupt everything. It will empower the next wave of FinTechs to re-imagine and design services and products in ways that were previously not possible.

Let’s not forget though, Open Banking is a true opportunity for the incumbents to be truly innovative. Plus, they have more money, greater domain knowledge and, an existing audience. Once the incumbents hit their stride, the FinTechs will struggle to keep up. Only the good ones will thrive, not just the ones that are well funded.”

Jen Storey

Director, Outside Insights

“For centuries, we have trusted banks to hold, move and manage our money. Now, Open Banking is putting individuals in control of their financial data. To facilitate a revolution in financial services, it is not enough that safety and security exists in the underlying standards. For it to thrive, the design, presentation and execution of new products and services must have the interests of the individual at their heart.”

Bryn Robinson-Morgan, Moresburg Consulting Limited

“The Open Banking Implementation Entity (OBIE) has worked collaboratively and closely with consumer organisations, leading charities and industry in the months leading up to its managed roll out (announced 13/1). This will help third parties navigate the necessary regulations in order to create an easily understandable customer experience with clear, plain English guidance, thereby building confidence with their potential customers when they are ready to launch their new and innovative propositions.“

As our Trustee, Imran Gulamhuseinwala, said recently:

“The work we are doing here is genuinely world-leading. The UK is the first nation to implement a standardised Open Banking solution. In the UK we are creating a single technology standard enabling new services to be easily built and offered to consumers and small businesses. Open Banking will help make Britain one of the best places in the world to bank and will, in time, stimulate the digital economy.

“While the UK is leading the way, we are incredibly excited at the opportunities created by working with peers around the world, and in Europe in particular. We are in active discussions with several groups seeking to build standards and we look forward to that work bearing fruit in 2018.”

Miles Cheetham, Head of Customer, at OBIE (Open Banking Implementation Entity)

Both positive and negative consequences may be associated with the shift towards open financial services. There might be more data sharing, which could lead to better contextual experiences and more rewarding financial outcomes for consumers. There may also be more data breaches, eroding trust, negatively impacting people’s lives and costing businesses millions. This risk may incentivise better Privacy and Security by Design (PSbD) practices, decreasing the future risk and potential impact of breaches and so on.

It’s likely we’ll come to experience all of the above in some way, shape or form. Having said that, I believe one positive consequence stands out most; the opportunity to shift away from financial services to life services.

What I mean by this is a shift in both mindset and focus. Rather than thinking about loans, we think about where people want to spend their time, what they want to do and how we might support them in actually living that life. This requires cultural, workflow and practice change to occur. We need to transition away from industry thinking to outcome thinking. We need to become obsessed with the customer job.

If we do this well, it may well lead to a concept Accenture call ‘The Everyday Bank’.

Image credit: Accenture

The infrastructure Open Banking and PSD2 require give us the opportunity to really start doing this. This, along with other data regulations are shifting the market towards a more human-centric model, where people might actually have control of their highly valued economic asset.

Yet to learn more about people’s lives, to deepen our customer relationships and deliver new, unique value propositions aligned to The Everyday Bank vision, we really need to design for trust.

The need for trust, data trust

Data sharing and Open Banking are inextricably linked. In fact, when thinking about one of the key metrics — something that has the potential to determine the success of propositions in the world of Open Banking, data trust first comes to mind.

Data trust is the trust a person places in an organization’s data practices. It’s determined by the propensity people have to willingly share their data with a brand. Thanks to the European regulations referenced above, hideaway terms and conditions, poorly designed opt outs and tiny little tick boxes won’t cut it. New design patterns have to emerge if we are to make it seamless, empowering and valuable for people to share their personal information.

When starting to think this way you might hear a lot about consent. Although consent isn’t the only legal grounds for processing data, it’s quite quickly becoming something that is perceived as an organisational asset. This is because consent efficacy or consent success is critical in the world of Open Banking. For any organisation to truly differentiate their proposition, they need to gain access to a view of people they may never have had in the past. They need to know the human being they serve as a customer better than ever before.

Image credit: celent.com

This is where the story really begins to change for the design industry. We have the power to empower the people we collectively serve as customers. We, as an industry, can collectively focus our efforts on developing augmented design systems (mental models, components and patterns, artifacts and outputs) that make data sharing requests, just-in-time data flows and personal data insights inherent to our daily workflow. These new design systems can enable us to more effectively do a big part of our future job — give people the power to control what they do and don’t share.

greaterthanexperience.design

Through radical transparency, consistent value delivery and owning consequence, we will also become more trustworthy. Our trustworthiness will earn us access to the right customer data, just when we need it most.

Throwing a slightly different spin on this, it isn’t about big data anymore — at least not exclusively. Organisational efficacy will soon be defined by its ability to access, effectively process and generate value from small data; data that comes directly from customers, partners, suppliers and open networks. This is the competitive advantage of tomorrow. It’s the business value of trust.

This is why data trust matters so much. And it’s why we, as designers, will be largely responsible for earning that data trust over the coming months and years.

Getting practical, this means familiarising yourself with the market, getting closer to the your customers — not just in the context of your existing relationship, but in the context of their life — and progressively evolving your design practice.

If you’re just getting started, we wrote a practical playbook together with Data Transparency Lab for this exact purpose.

If you’ve already begun this journey, I’d suggest taking a collaborative approach. This might mean time-boxed pair design challenges with a lawyer, assessing the design patterns from Personal Information Management Services (PIMS) and leading Customer Identity and Access Management (CIAM) solutions, and also experimenting like crazy.

None of this has been figured out completely. It’s hardly begun in so many ways, so the faster you learn, the faster you’ll earn trust. The faster you earn trust the sooner you can start delivering superior value propositions — the thing we’re all motivated by.

Open Banking is actually about people

You might think I’m just harping on about data, but when you think about it, designing for trust is designing for people. Trustworthy design is inherently ethical, it empathises with context and it focuses intently on serving people first.

I spoke about this recently at a Cognizant Future of Money event in Sydney.

My take is this; the future of money isn’t about money, it’s about people. It’s about finding ways to help people use their money more effectively so what matters most to them is easier to achieve and/or experience. Putting people at the centre of their own data ecosystem by giving them the power to choose what they do and don’t share is a big part of achieving this.

So whether you’re working directly in Open Banking or not, chances are it will impact something that you do. The time to start thinking and acting on these changes is now. Don’t wait until the patterns I mentioned above have been developed. Be part of developing them. The more of us in on this the faster we can move forward and create a future where life, not financial services drive a lot of the value in our economy.

Greater Than Experience Design

Insights on the intersection of data ethics, privacy and design from the team at greaterthanexperience.design

Nathan Kinch

Written by

A confluence of Happy Gilmore, Conor McGregor and the Dalai Lama.

Greater Than Experience Design

Insights on the intersection of data ethics, privacy and design from the team at greaterthanexperience.design

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