The open data revolution: a US perspective
In conversation with Anil Choudary, CTO, Alliant Credit Union
Published: 19 May 2023
By May Moorwood
Digital Content Producer
Get geared up for MoneyLIVE North America with our next speaker interview! We spoke to Anil Choudary, Chief Technology Officer at Alliant Credit Union about the driving forces behind the open data movement in the US. While the last few years have been all-go for open technology in Europe, Anil addresses the challenges of maximising the open data economy in the absence of mandated Open Banking. From the benefits of democratising data for better decision-making and transparency, to embracing open APIs to tap into the opportunities for innovation, get your sneak preview of Anil’s thoughts in this exclusive interview!
What’s driving the open data initiative in the US, given that Open Banking isn’t mandated?
Since the introduction of the EU’s revised Payment Services Directive (PSD2) in 2018, Open Banking in Europe has largely been driven by the mandate for banks to provide access to customer account information and payment initiation services to third parties upon customer consent. Without the same regulatory motivation in the US, we asked Anil for his top five reasons to move towards an open data economy in America.
“Primarily, open data initiative(s) in simple terms is democratisation of data!”, says Anil. And there are many advantages to this democratisation:
- It facilitates better and more-informed decision making.
- It fosters a higher degree of transparency, thereby creating a level playing field for all, particularly start-ups.
- It presents opportunities to develop data-driven solutions and services.
- It enhances trust and promotes partnerships among data providers, consumers, and service providers.
- Lastly, it simplifies governance processes.
It’s no surprise that “open data initiatives continue to gain traction even though not mandated in the US.” The question is then…
How can banks begin to embrace open APIs and make the most of the open data economy?
“First and foremost, banks need to identify use cases (value chains) that can deliver highest value to customers and businesses by leveraging open data capabilities.” Then, says Anil, banks should build and consume open APIs to provide these services to consumers and businesses. Throughout this process, it is essential for banks to consider three important factors:
- Data security and regulatory compliance: banks must prioritise safeguarding data and ensuring compliance to maintain customer trust and protect sensitive information.
- Optimal channels for delivering a high-quality experience: banks should aim to provide a seamless and best-in-class experience to consumers, businesses and partners to drive increased adoption of Open Banking solutions.
- Ongoing improvements and innovation: by embracing new technologies, exploring customer feedback and adapting to market demands, banks can remain competitive and deliver cutting edge solutions.
“First and foremost, banks need to identify use cases (value chains) that can deliver highest value to customers and businesses by leveraging open data capabilities.”
Hopefully by addressing the three key factors Anil lays out for us, banks in the US can successfully navigate the Open Banking landscape, drive adoption and offer compelling services to meet the evolving needs of consumers, businesses and partners.
How can banks strike the balance between maintaining strong customer privacy and getting the most out of open data access?
Anil breaks the balance down into three key factors:
- “Delivering transparency through education to customers on how their data is or will be utilised as part of various decision making or data sharing processes.”
- “Building strong data security, data management and governance, and regulatory compliance practices within the bank”
- Continuously focussing on “identifying and delivering the best experience and highest value to customers in a transparent decisioning framework while accounting for fraud.”
To effectively balance the need for strong customer privacy with the benefits of open data access it is crucial to focus on these three key areas, says Anil. Only then can we build trust with customers and deliver the superior banking experiences needed to stay competitive in an increasingly open data-driven market.
How can access to an open data world enhance banking and payment propositions for customers?
The result of an open data world is the cultivation of a collaborative and competitive partner ecosystem that strives to deliver the highest value customer-centric banking.
“An open data world will enable and significantly enhance customer experiences on multiple fronts in banking and payments ecosystems”, says Anil. Firstly, the democratization of data would lead to faster service delivery and therefore a higher customer satisfaction This satisfaction is only boosted with the creation of a unified platform that consolidates various banking services and therefore provides evermore seamless customer experiences. Meanwhile, the establishment of robust data security and the implementation of transparent fraud prevention measures speaks to the all-important privacy capabilities of banks that would benefit from the expansion of the open-data economy. Ultimately, the result of an open data world is the cultivation of a collaborative and competitive partner ecosystem that strives to deliver the highest value customer-centric banking and payments systems – what more could you want?!
If Anil persuaded you of the various driving forces behind the open data movement in the US, catch him speaking at our next event, MoneyLIVE North America in Chicago next month, where he’ll be our keynote speaker for the session ‘Open Data World’ – you don’t want to miss it!
Chief Technology Officer, Alliant Credit Union