Staying ahead of the game by embracing a platform approach

What are Nordea’s latest announcements and initiatives regarding Open Banking and partnerships?

Our goal has from the start been to go beyond regulatory requirements in Open Banking and provide premium APIs that fit the changing needs of customers across all segments.

Nordea has many business areas working with partners to address business challenges, and is continuously exploring new services, technologies and ways to collaborate with startups and fintechs that will help deliver our tech strategy now and in the future. Thus, also improving customer experiences, both within corporate banking and personal banking.

We have taken the first steps on our way to becoming a platform player within banking by using Nordea’s Open API platform to provide premium APIs which fit the changing needs of customers and partners across all segments. For instance, we offer corporate customers premium services with real-time accounts information, automation of foreign exchange in different areas and consumer finance services. We are thereby enabling corporates to become real time businesses or to scale and grow our partners’ businesses by offering banking as a service through APIs. I strongly believe in meeting the customer in their preferred channel or in the event where a specific need appears.

We have plenty of initiatives in the pipeline, with more and more API services in the making. Next in line is simplifying our corporates cash management processes by offering a payment initiation service. In the Nordics we see a growing number of corporates starting to leverage the benefits of connecting to our Open APIs, and a growing demand for new services.

Nordea has already been working with Open Banking and APIs for some time. What are the lessons learned and challenges so far?

It is very important to accept, understand and embrace the changing customer behaviour and business landscape brought about by new technology to be able to see the benefits. There is an untapped potential to open a wide array of API services that exceed the ones mandated by PSD2, bringing a whole new meaning to both customers and the banks business.

While dealing with the challenges of the Open Banking ecosystem, it is essential for banks to look for trusted partners to support them in their journey and help them identify customers’ needs and solutions that meet those needs via APIs.

For customers, be they corporates, SMEs or consumers, the focus shouldn’t be on Open Banking itself; it should be on the problems that are solved and the new value that is created. As previously mentioned, Open Banking for us is about a short-term focus on compliance as well as a longer-term focus on enabling commercial opportunities. Already from the beginning, we designed our platform to also become part of a new interface for offering commercial services, which is a long-term commitment within the bank.

Are consumers aware of Open Banking? Do you think this prevents the success of Open Banking? And what would be the best ways to address consumer education?

Generally, banking customers are not aware what the banks technical environments look like and how they work. They don’t know how banks transfer money between each other or how the clearing systems work. Therefore, as banks ensure that customers can access their data in the bank using third-party applications, they also have a responsibility to educate customers about how data is shared, about data permission and privacy.

Financial services are typically enablers or components of the primary service or customer demand. Consumers should experience the benefits that Open Banking brings, but also be informed of how their data is used and what they approve when signing up for a service. Great services with great user experiences are something we as consumers easily start to use, adapt our behaviours to and eventually take for granted.

In terms of next-level Open Banking: what do you see as the key trends for 2020 and beyond? What is the next phase in Open Banking for Nordea?

There appears to be an increased number of banks connecting to other banks exploring the possibilities of creating value added services. This will be the trend for 2020 – banks aggregating and using other banks` APIs. Furthermore, there are more corporate customers and tech companies integrating directly with the banks through APIs in order to improve their processes as well as their end customer offering.

We see more and more corporate customers’ system providers (treasury management systems and other types of system providers) adapting to banking APIs. This is mainly driven by the corporate need for more automation, efficiency and to take away manual processes and lower risks.

People in need of financial services tend to turn more to use different commercial platforms where the need occurs. We spend less time in the banking interface or bank branch for that matter. The opportunities outweigh the short-term threats for banks.

In the long term, those banks that unleash developers’ potential in their communities and allow for producers and consumers to meet and have high-value exchanges, will be the ones benefiting the most and the future platform players. That’s the vision for Nordea as well – becoming the platform for financial services in the Nordics. In order to stay ahead in the game, banks need to accept the change, embrace it and make something great out of it!

This story originally appeared in The Paypers. You can read more news from the payments space in the The Paypers here.

For more information on Open Banking at Nordea write to Ulrika at ulrika.claesson@nordea.com.

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