Key customer segments
Open APIs alone do not add any value. There needs to be a clear end-goal around customer impact, which can only be created by knowing the customer’s needs and jobs-to-be-done (link). When it comes to Open Banking, there are three broad key customer groups: internal customers (internal departments who work with customer data), external partners (third parties that cooperate in e.g. marketing, product development or distribution) and external end-customers (third party developers, banking customers, your partner’s customers, etc.).
The goal of the key customer segment field is to get a common understanding of who you’ll create value for and what customer problems you’re actually solving with the help of Open Banking. Thus, the first step is to evaluate for which customer groups and which of their needs Open Banking might be the right solution.
After outlining which segments will be targeted, it helps to define the basic objectives around business and customer impact. What are key business and customer objectives? How do we measure success? Each high-level objective should have at least one metric that will help to assess if the Open Banking activities actually contribute to reaching the objectives.
Next, as many high-level ideas for Open Banking value propositions as possible are ideated. What might help serving each target customer’s need better, cheaper, or faster? The ideas are clustered and new ones can be added during the whole process Keep in mind that Open Banking is all about product management: what’s the actual product that a PSD2 API provides, and for whom? What other products or services can be built around opening up or receiving additional data?
You can’t talk about Open Banking without mentioning ecosystems. Open and partner APIs provide a whole new possibility space around creating value with or through external parties. Third party providers (TPPs) will utilise the PSD2 APIs anyway. How to make sure to become a trusted and preferred partner for TPPs, so that they are incentivised to create value-adding services? Who are the external partners that might become a new distribution channel? Beyond that, who might help you enhance or create new products, as account, transaction and additional data can be made available in real-time? This section aims to answer these questions, so that it’s clear which FS and non-FS ecosystems you will engage in.
One core aspect is to decide how Open Banking activities will be priced and monetised. Some offer open APIs free of charge, while others develop structured monetisation models per target group and use case. These decisions can be derived after clarifying the fields explained before. The most common monetisation models for APIs are:
- subscription fees
- pay per use
- tiered pay-as-you-go
Internal usage of APIs of course contributes to enhanced product development, faster go-to-market and improved efficiencies, and cost savings.
There are various ways to engage in Open Banking activities. Hence, defining which parts of the value chain will be owned and which parts will be executed by others helps to understand the internal requirements. What current capabilities can be utilised and what needs to be built up?
External enablers are the partners that help to implement and to get Open Banking activities to the market, such as aggregators, plug-and-play solutions, or simply external development teams.
Data and infrastructure
Open Banking moves the competitive advantage from owning data to how data is utilised. Hence, this field clarifies what internal data will be opened up and what external data is needed to deliver the value propositions. Beyond that, how will the data be managed and how feasible are the initial ideas based on the currently deployed infrastructure? The point here is not go into technical discussions, but to provide a first assessment of what’s realistic. That’s why when developing the strategy, technical input is mandatory.
Governance, risk and compliance
Finally, as banks and any other TPP that uses PSD2 APIs is a regulated entity, there needs to be a first understanding of how Open Banking activities affect the current GRC models. Often cited examples for this field are e.g. data security, TPP risk assessments, and GDPR.
Kick-off your own Open Banking initiatives with the Open Banking strategy canvas
Before going into execution mode it helps to clarify the basic assumptions about how Open Banking will lead to increased customer impact or business value. Therefore, we developed the Open Banking strategy canvas to kick-start strategy sessions and to involve different stakeholders in the strategy process. Each field can be developed as thoroughly as it needs to be, however, the value lies in the execution.
That’s why we always try to combine the strategy development with subsequent Open Banking pilots. After defining the strategy, we prioritise the top Open Banking pilots, which are then tested directly with partners and end-customers. This way the strategy is informed by direct market feedback and ultimately the winning pilots can be confidently implemented and scaled further.
Download the Open Banking strategy canvas for free below: