Across Europe, inventive apps that use open repayment platforms are gaining traction, which is revolutionising money management approaches from a product to value-based focus. Also, the GDPR and PSD2 will shake up how financial services manage security and privacy. For banks, this means a profound overhaul of their marketing strategies.
The GDPR and PSD2 will take the financial world by storm and seem at odds with one another; but actually, they serve the purpose of putting your customers first. These two new regulations will majorly impact how customer data is handled, with the GDPR ushering in more controlled rules regarding data storage and usage, while the PSD2 requires banks to open up their databases. But it isn’t necessarily something to frown at; in fact, benefits are abound with this changing landscape. Financial Services can use this to their advantage and there are some inspirational examples we would like to share.
GDPR: protecting your customer data with technology
In our conversations with banks, we have encountered a strong drive to comply with the GDPR and to put the customers in the driver’s seat regarding their own data. Many have asked us to help with protecting customer data and taking a frugal approach to data collection.
A concrete wish from one of our clients was to strip down unnecessary third-party trackers on their website without trading off the benefits of customer experience and marketing abilities. Our data management solution was able to close the loop by giving the data control back to the client, and consequently, to the customers too. While this example only covers the bank’s own website, it is important to stress that customer data control needs to cover all data sources, including those from business partners. And yes, this is possible, and we are able to meet these needs and requirements too.
We strongly believe that technology plays an important role in addressing the paradox of protection and transparency efficiently while also delivering the exact services customers want. By now, the customers have spoken and are empowered by regulations – are you willing to listen? Can you afford not to?
PSD2: embracing open APIs for customer-centricity
Application Programme Interfaces (APIs) are tools used to build application software, and as you can imagine, are traditionally heavily guarded due to their proprietary nature. However, the PSD2 obligates banks to open their APIs, which is revolutionary and disruptive to traditional banks. But cooperations between different partners allows for a wider scope of customer service, thus shifting the focus from bank-centric to customer-centric.
A fine example of a bank shifting away from traditional money management approaches is our client ABN AMRO. Their progressive Tikkie App is a value-based open repayment platform that lets its users send and receive payments through Whatsapp, regardless of who they bank with. This cooperation between Whatsapp and various payment providers sets the tone for a change in attitude towards open APIs, which is required if banks want to extend their services beyond their own business silos.
Thinking outside of your own customers and widening your reach to a broader audience is the type of forward-thinking that’ll keep your bank thriving. With this agile and adaptive mindset from ABN AMRO, they prove to be responsive to change while leveraging the trust they’ve built as a reliable financial institution. Not only have they cooperated with a trusted partner to bring a convenient payment service to people across different banks, but they’ve even managed to make it free for all users. This customer-centric attitude is made possible with the PSD2’s bold change in how APIs are used.
A protected and connected customer ecosystem for safe and seamless journeys
In this new financial age, there is a need for banks to think outside of the box and to be able to deliver on the GDPR and PSD2 requirements – protecting and connecting at the same time. In doing so, banks make the right move towards gratifying their customers and guiding them towards a relevant and personalised experience and, in effect, put customers first.
Your customers rely on you to protect their data and to meet their needs on their journey with you and your partners. Ironically, managing data is key in delivering this customer-first challenge, successfully. It’s evident that the bank of the past is not the bank of the future – while they once held the sole purpose of storing money, banks of today and tomorrow need to broaden their horizons and focus on delivering safe and protected customer experiences across all available channels.
Want to learn more about how Relay42’s solution can help you address the upcoming paradox in financial services? Take a look at our guide on reaching beyond business silos with more inspiration for jumpstarting the GDPR and PSD2 era.