How open finance will push advanced consultancy

The failure to take offopen banking it is there for all to see. The customers of digital banks who use this type of service are less than 2%, while the financial institutions of the Old Continent have incurred 3.5 billion euros in costs to develop and manage infrastructures of this technological frontier. However, it would be wrong to throw the baby out with the bathwater, neglecting the importance of sharing financial data for both operators and customers. This is the message that emerged during the event “Open Finance: new opportunities for advanced consultancy and private banking” organized by Aipb (Italian Private Banking Association) e PwC Italyduring which wealth management analysts and managers discussed each other.

The reasons for the lack of success

So far theopen banking had a poor performance following above all because the development has been driven by regulation, with little involvement of market operators, as well as due to the lack of incentives and a strong focus on security, to the detriment of the user experience. On the customer side, this has led to a lack of awareness and trust.

That said, analyzing the mistakes made can be the best basis for avoiding repeating them. Thus, according to the analysts who attended the event, open finance will truly be able to revolutionize the market to the extent that it offers theregulated access to customer data for all financial services, while until now it was only foreseen for payments. To seize the great possibilities for growth, development and integration of the offer, the fundamental lever will be that of trust that the industry will have to build by communicating with customers.

What will change from next year

The real revolution is expected from the beginning of next year, when the final version of the European Fida regulation (Financial Data Access) which provides regulated access for all financial services, we will enter the era of open finance. Currently, the draft regulatory framework extends and regulates the sharing of financial data beyond payments. In fact, subject to the customer’s consent, financial institutions are required to provide authorized third parties, i.e. the so-called “Financial Information Service Providers (Fisp)”, with access to credit and debt data relating to investments, insurance, pensions and cryptocurrencies.

Towards a new service model

Aipb’s analyzes have led to the identification of three key challenges for the sustainable growth of its service model over time: the ability to strengthen the protection of future generations of customers with a multigenerational counseling approach; the development of one “protection” that is not limited only to the financial sphere; the ability to seize the opportunities offered by the use of data and fromartificial intelligence.

Open finance directly affects this last area, representing an opportunity to further grow the service method that has characterized the consolidation of private banking in our country: that of advanced consultancy.

New role for the professional

The private banker will take on a key role because he will be called upon to explain to customers the benefits generated by sharing a wide range of confidential financial information. The most important element for the success of open finance will be the customer trustwhich is the cornerstone of the relationship between customer and private banker, as noted by the president of Aipb, Andrea Ragaini. “The possibility offered by Fida of having a large set of data will allow private companies to offer an even broader service and will amplify the opportunities for customers over time,” he underlined.

“The European and market operators’ commitment to the development of open finance will have a positive impact on the growth of the financial sector and the evolution of private banking”, is the belief of Mauro Panebianco, partner of PwC Italia, leading EMEA asset & wealth management advisory. According to the expert, “the drive for innovation is fundamental for the competitiveness of the sector and for the companies that operate in it, but it will also guarantee greater financial inclusion for customers and consumers”.