BBVA API Market
This is by no means a new concept, but 2018 will be the first year of online savings or opening alternative accounts for many. While traditional banks are facing a future with less physical offices, other financial institutions have been and are being established with this limitation as their flagship.
PwC published the results of a survey conducted with bank clients a few months ago. The survey stated that 46% of the participants use online banking services as the main method, a figure that has increased by 27% in only five years. For those born after 1990, this figure goes up to 82%. Omni-channel banking (online + offices) is chosen by 45% of all clients at the close of 2017, being the second choice of consumers in general for the first time. And only one in every ten people mentioned that they manage their savings in person at the branch.
The white paper states that “it affects all income levels”. “We know that clients are not visiting branches as much as they used to”; the frequency has changed from “a few times a month” to “a few times a year””. These trends are not being covered by banks as required and many are choosing native digital banking. According to PwC, in average, “only 25% of consumer banking products are available online” – a gap that must be covered by all products offered by online banking.
Even though the market is highly volatile, many young startups are opting for this form of funding instead of using traditional channels. According to Coindesk, 743 million dollars were raised in different ICOs in November 2017. Investors have already invested over 87 billion dollars through ICOs over the past few years and the number of offerings is growing non-stop.
“The price of ETH (Ether) and BTC (Bitcoin) will be the two main questions” to be considered before an ICO is opened, “and, if alternative methods are available to execute and trade with secure tokens.” Coindesk expects many of these alternative systems to be available by the end of the third quarter of 2018, receiving part of the portfolio currently in VTC or ETH, adding diversity to the market and small havens of stability.
Investing from your smartphone is an attractive and appealing idea. But, investing with the personalized indications of an automatic learning algorithm that learns from your actions and is alert while you sleep, would be even more attractive and appealing.
Simon Roy, CEO of Jemstep, a robo-advisor development firm, stated that “putting a logo is not enough.” “We are seeing how the industry is changing; an industry in which consulting firms have stopped using the automated solutions associated with standard and automated recommendations.” If the market finally adopts this type of tools that give advice with the open banking APIs, which also give access to balances and credit options, we can create a huge ecosystem, in which the investor or money saver has access to knowledge or strategies that were only available to brokers or financial institutions until now.
User experience will be key. These firms “focus on the stability of their digital recommendation platforms on an ongoing basis to make sure they operate in the long-run.” This will boost consolidation. According to Roy, focusing on the decisions made by digital advisors in relation to many different objectives will be standard practice.
In 2018, mobile payments will generate 930 billon dollars worldwide and this figure will be in excess of one trillion in 2019, according to TrendForce and NFCWorld. With the adoption of mobile payments, users will have a more positive image of a fully mobile banking system. In the United States, half of the adult population that owns a smartphone is already a mobile banking user.
In China, a recent analysis conducted by Forrester concluded that “the most successful banks share a similar and iterative focus on mobile banking.” “All have built strong relationships between their digital business strategy and technology management teams”, creating systems, applications or platforms that are “more successful with clients and which have made banks more profitable.”
“Mobile banking will continue to overtake traditional banking as the preferred banking service of consumers, as the digital experience perceived by users and clients becomes richer and these become better acquainted with the systems.” This is Kirk D. Borne’s conclusion, Principal Data Scientist at Booz Allen Hamilton. “This will include digital banking, with no friction between consumers and businesses, payments between consumers with a single click, new opportunities for cryptocurrency, biometric records that do not require the use of passwords, conversation interfaces and localized offers and services.”
Carlos López-Moctezuma analyzes the present and future of open banking in a roundtable dedicated to this matter, where essential questions such as user growth curve, the role played by fintech and the profound evolution that banks such as BBVA and others have experienced in the past few years.
Product Design, User-Focused Design (UFD) and User Experience (UE) cannot be understood without APIs. Neither can the role played by major technologies in hardware and software production.