'Open' banking disruption brings opportunities as well as threat
Disruption is a hot topic at the moment, but it's not new. Technology has been disrupting every sector for as long as we can remember - in banking, with the advent of automatic direct debits, withdrawing money from the 'hole in the wall', and transferring money online.
These are all taken for granted today, but once upon a time these were disruptive technologies in their own right.
It is very easy to underestimate the impact that innovation is having on the way we bank, but the scale of the opportunities and benefits for customers are huge. People already bank in radically different ways to 10 years ago, and even five years ago. Customers quite rightly want 24-hour banking to be available in their pocket at the touch of a button. It's our role to ensure that this need is met in a safe, secure and reliable way.
Disruption is continuing today, but the big difference is that the power to disrupt has been democratised.
This allows for the open sharing of ideas and feedback between banks, their customers and third parties such as fintech developers and coders who are working on apps and services to help customers manage their finances and lives.
Traditionally rather closed institutions, 'open' banks are becoming the new normal, in the full expectation of being disrupted.
The result is increasingly relevant solutions across the banking sector and an improved ability to identify and meet the needs of customers. This is key: after all, innovation can't be just a word; it has to mean something and result in a tangible outcome for customers.
In September 2017, ahead of the introduction of the Revised Payment Service Directive - dubbed PSD2, Ulster Bank unveiled Ireland's first open banking application programming interface (API), to help take Open Banking from concept to reality. This API leverages market-leading technology and security expertise from our parent company RBS to allow the seamless and secure linking of customer accounts with third-party products and services, with customers' explicit permission. This facilitates greater information-sharing in a safe and secure way for the benefit of customers.
Our annual Hackathon puts the spirit of collaboration into action and each year it moves us further into the open banking space, with ideas, concepts and processes that were previously unheard of, becoming closer to reality in Irish banking.
Attracting up to 250 participants, attendees have access to a host of supports at Dogpatch Labs, including rich and wide-ranging APIs, engineering support, industry mentors and pitching workshops, so that they can not only imagine and create groundbreaking solutions, but also communicate these, and hopefully commercialise them.
It's not enough to disrupt from the outside though, disruption also needs to come from within. By fostering intrapreneurship and challenging your internal audience to tap into their entrepreneurial spirit, banks can encourage staff to think like third-party disruptors.
We've been a supporter of this approach for some time, with Ulster Bank's own innovation team based in Dogpatch Labs, sitting shoulder-to-shoulder with fintech companies. This year's Hackathon also includes for the first time a category to draw out ideas from staff members.
Disruption is a force for good, and as we move further along the road of open banking, the benefits of collaboration will ultimately translate into greater opportunities for consumers.
Ciarán Coyle is chief administrative officer, Ulster Bank