Democratization of Banking Is Coming to an Economy Near You.

2. November 2017.

For a very long time Financial Institutions have acted just as the guardians of their clients assets, but also of the ledgers that record the activity of those same assets, and have long considered this data to be under their sovereignty as well. API access combined with regulatory legislation in Europe (Open Banking in the UK, PSD2 in the EU) have shifted the control to the consumer, and now FI are adapting to delivering raw data to client-authorized third parties.

Banks that embrace this evolving digital landscape can drive innovation and create new opportunities on their own. If they don’t change with the marketplace, customers may leave to find a different bank that does.

Mercator Advisory Group expects the portability of financial history opening up at the beginning of next year for FI customers in the U.K. and the E.U. will not bring mass migrations of consumers to new FIs, and competition while ratchet up slowly. What is expected is the FIs making early investments in systems to better able to field and respond to individual consumer customization requests through a network of fintech collaborators will have an early advantage. These lowered barriers to entry in financial service delivery will serve to move to a more democratized banking system in the UK and Europe and spur market demand driven change in the U.S. and other developed economies.

Overview by Joseph Walent, Associate Director, Customer Interactions Advisory Service at Mercator Advisory Group

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