The WF Gateway: Spearheading the Open Banking Movement
Currently, 62% of banks believe that big data and advanced analytics are going to impact their business models, and 79% of those banks believe this impact will occur in the next couple years1. Wells Fargo has recently launched the Wells Fargo Gateway, which provides developers access to open APIs that make it easier for third party companies to interact with bank data. Wells Fargo sees the Gateway as a unique opportunity to enable better experiences in many ways for the company, their customers, and the industry as a whole.
Firstly, the Gateway stimulates innovation by making it easier for FinTech companies to engage with the industry. Currently, these companies are limited to the data they can “screen scrape,” which is when users allow third-party companies to log in to their online banking system, and collect screen display data to translate into their own apps. Scraping can also occur when third parties record and consolidate publicly available datasets. This method of gathering information is not only risky for both the bank and user, but it is also an archaic and ineffective way to collect high quality and accurate data. By making it easier for third-party companies to access customer data, Wells Fargo opens the floor for better experiences for their customers through services offered by other companies. These new opportunities will increase the speed at which innovation and rapid development can occur throughout their organization and the industry as a whole.
Secondly, the Wells Fargo Gateway provides the bank with a secure channel to share customer data. The Gateway gives the bank control over how companies are accessing sensitive data and allows them to safely monitor and limit data as necessary. This prevents companies from over-collecting and accessing data in unsafe ways, therefore mitigating the risks associated with data-sharing.
Finally, allowing other companies to interact with bank data makes the banking experience more enjoyable and seamless for users. Financial applications such as Mint have gained extreme popularity among consumers, but the experience is limited by the data these applications can access through screen scraping or formal agreements with specific companies. Opening bank APIs to developers through the Gateway will allow them to better integrate user data into their applications, allowing for a more robust and enjoyable user experience. As well, it allows consumers to tailor their banking experience to their own needs. Users will no longer be limited to the banking services provided by their bank, and instead will have access to many applications that can be easily integrated into their current banking experience.
Needless to say, with the introduction of open data and APIs, the competitive landscape of the banking industry will begin to shift to include more FinTechs. This will result in a massive increase in competition and innovation, and consumers will begin to demand much more from their banking experience. The launch of the Wells Fargo Gateway was a big first step in the what many people believe is the inevitable direction that banks are heading in. Soon we will likely see many other banks following this same path, allowing for a more enjoyable, personalized, and customized banking experience.
Sources
1https://thefinancialbrand.com/62084/banking-innovation-fintech-disruption/
https://www.pymnts.com/api/2017/bankings-open-future/
https://www.americanbanker.com/news/wells-fargo-latest-to-share-customer-data-with-intuit-via-api
https://www.americanbanker.com/news/wells-fargos-bid-to-vanquish-screen-scraping
