Why is people saying that open banking lacks digital maturity?

The financial sector is moving towards a scenario in which innovative business models and new ways of interacting with users will arise thanks to the use of data and technology. It’s the so-called open banking. In this evolving ecosystem diverse actors come together, from the most traditional entities and their spin-offs to digital banks, fintech companies, consultants or the Big Tech, among others. All of them will conform, also supported by changes in legislation such as the PSD and PSD2 regulations, a safer, faster, modular and open banking.

To discuss this process of transformation from different perspectives, taking into account the particularities of the Spanish market, the meeting “Open banking: the future of banking” was held in Madrid, organized by the European savings platform Raisin. This event was attended by some of the protagonists of this financial ecosystem of change, such as FinReach, a leading provider of software solutions aimed at banking entities. Its strategy is to develop an API platform in which any agent of the financial sector has access to services that allow them to centralize, manage and activate information to give recommendations to their users instantly. “All this with the least effort of integration possible, at an affordable cost and with the possibility of pivoting different products within the platform” said Adriana Gaitán, Country Manager of FinReach in Spain.

During a round table on open banking, to which experts from Banco Santander, Self Bank and Coinscrap were also invited, the FinReach board said that “the Spanish market is too concentrated around traditional banks” and also commented “ fintech difficulties when undertaking negotiations with large banks, since these technological development costs them more than their current manual processes “. Even so, FinReach solutions, like its Account Change Service, have been well received in Spain through entities such as Self Bank. Its deputy general director, Fernando Egido, advocated the meeting for “being open and collaborating agilely with other agents in the sector in search of the best solution for a modular and scalable platform”.

However, David Conde, co-founder of Coinscrap, pointed out that “banks do not see Fintech as a serious threat, except for certain exceptions, which is why they are leery of collaborating and opening their core to third parties”. From Banco Santander, Diego Calascibetta, director of the Strategic Digital Partnerships area, said that “a cultural change is still needed in the organization”, although they have already started their own open banking and fintech ecosystem platform with an eye on the markets of The United Kingdom and the United States, which, in their opinion, are more advanced than in Spain. “This lack of digital maturity is due to the fact that we have lost a lot of time on issues of regulation and survival”, added the head of Self Bank.

Regarding the main problems of the ‘fintech’ to mature and reach the user, the representative of Coinscrap acknowledged that it is difficult to implement a successful B2C strategy in Spain due to the size of the market itself: “Banks are the ones who still have the clients, who do not dare to experiment with their finances. “ “The education of the user is fundamental in this sense, so that they know that the technological developments we do take into account security and comply with all the rules and regulations that exist in the market,” said Adriana Gaitán, of FinReach. According to Self Bank, “banking gives confidence”, but still encouraged all members of the financial ecosystem to “empower citizens to manage their finances as they wish, but without expecting anything in return, with the objective of achieving greater symmetry in the relationship between banking and client”.

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