With the start of a new year comes predictions for what that year might hold and in the world of open banking, where things move at pace, these predictions can be a little harder to pinpoint but a lot more interesting to explore. So, we decided to sit down with Ozone API’s Co-CEO, Huw Davies, to find out what he thinks might be in store for 2024.
Will open banking still be a big focus in 2024?
As we enter 2024, we’re still seeing open banking and open finance gaining momentum on a global scale. Established markets are still experiencing a continual rise in usage, while other regions are swiftly embracing these concepts and moving towards implementation.
Latin America and the Middle East continue to be hotbeds of open banking implementation. And following the FCPB’s announcement in November the starting gun has truly fired in North America.
We’re also now starting to see the early stages of banks really understanding the opportunity beyond just meeting regulation and they’re starting to move. Notably, banks are increasingly recognising that the same open APIs deliver transformative potential in product distribution, customer outreach, and enable their solutions to be seamlessly integrated into digital experiences. Although it’s early stages for many, innovative large banks are notably progressing in the right direction.
So yes, it will still be a big focus in 2024. In fact 2024 will be the biggest year yet.
How will it differ between the biggest financial institutions and the rest?
Large financial institutions are continuing to invest to enhance their digital capabilities and their API foundations. This remains key to adapting to thrive within a digitally embedded ecosystem. Meanwhile, new entrants, equipped with impressive technology, grapple with the significant hurdle of establishing meaningful distribution channels, spanning the spectrum in between these extremes.
However, the pivotal element for success lies in acknowledging that exceptional technology serves as a crucial facilitator, but its true potential is unlocked when coupled with strategic thinking focused on delivering tangible value to the customer. Either element in isolation falls short of achieving comprehensive success.
How are banks thinking about embedded finance?
Without a doubt, the trajectory of integrating financial experiences into digital experiences is set to continue, demanding that banks continuously evolve their tools.
Embedded finance is not about stand alone platforms and new fintechs. It’s about the providers of financial products (for example banks) making them accessible via APIs so that they can be embedded into digital experiences. Being there for the customer at the right time, in the right place and with the right context.
This evolution is essential for ensuring the secure yet seamless presentation of bank products and services; failure to do so will result in being overshadowed by competitors. While traditionally, banks heavily relied on their proprietary channels for customer interactions, this dominance is unlikely to endure in the medium to long term.
In 2024 I think we’ll see a shift in the dialogue with banks at the heart of open finance discussions rather than it being the domain of a small number of fintech specialists.
What does 2024 mean for Ozone API?
We’re hugely excited about the ever increasing worldwide momentum in open finance. Nearly all markets are progressing along this trajectory, and the establishment of secure, consent-based access to financial services through APIs is beginning to unlock substantial potential. This development is particularly impactful in growing economies, addressing financial inclusion challenges, and paving the way for new revenue streams for banks. 2024 is poised to be the most significant year yet for these advancements.
Our focus has been global from the outset. We support all global standards and are helping banks, financial institutions and regulators to deliver. 2024 will be the biggest year yet for open banking and at Ozone API we are excited about being at the forefront of driving this acceleration.