World FinTech Report 2019
The industry is transitioning from Open Banking to “Open X”. Driven by four fundamental market shifts, the industry is moving to a shared marketplace that demands improved collaboration and specialization.
The World FinTech Report (WFTR) 2019, published today by Capgemini Group and Efma, indicates that even though Open Banking has yet to reach maturity, the financial services industry is entering a new phase of innovation – referred to as “Open X” – that will require deeper collaboration and specialization. The report advocates that banks and other financial services ecosystem players must begin to plan accordingly and evolve their business models.
The WFTR 2019 identifies a dual challenge: FinTechs are struggling to scale their operations and banks are stalling on FinTech collaboration. As a result, industry players are looking to leapfrog beyond Open Banking towards Open X, which is a more effective, structured form of collaboration, facilitated by Application Program Interface (API) standardization and shared insights from customer data. The era of Open X will create an integrated marketplace, with specialized roles for each player that will enable a seamless exchange of data and services, improving customer experience, and expediting product innovation.
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“Open Banking has long been regarded as transformational for financial services, but this report shows it is just one part of a much bigger picture,” said Anirban Bose, CEO of Capgemini’s Financial Services and Member of the Group Executive Board. “The industry is on the verge of a more comprehensive evolution, where there is opportunity to leapfrog into an integrated marketplace that we are calling Open X. In Open X, there will be seamless sharing of data, and ecosystem partners will be able to collaborate in a far more comprehensive way. Our research suggests that banks and FinTechs need to prepare themselves for a more radical change than many previously anticipated.”
“The findings of the report could not be clearer: collaboration will be the foundation of the future of financial services,” said Vincent Bastid, Secretary General of Efma. “In the era of Open X, ecosystem players will have to work together more effectively than they have previously. Only by embracing collaboration and new, specialist roles can both banks and FinTechs thrive and best serve their customers. It’s clear that many barriers to collaboration still exist, and there is an urgent need to overcome them for collective benefit.”
The World FinTech Report 2019 is based on a global survey encompassing responses from 116 traditional financial services firms and 40 FinTech firms including banking and lending, payments and transfers, and investment management. Questions sought to yield perspectives from both FinTech and traditional financial services firms— exploring the emergence of Open Banking in the financial services industry. It sheds light on the impact the new ecosystem will have on all the stakeholders, the challenges and concerns that firms will face, and the emergence of new businesses and monetization models in this space.