Open banking makes consumer banking information such as transactions and payment history available to third-party payment services and financial service providers through the use of APIs. While the initiative is trying to ensure transaction security, and promote new financial products and services, adoption is massively dependent on a smooth customer experience.
Enter Customer Experience Guidelines (CEGs). As defined by The Open Banking Implementation Entity (OBIE), these recommendations “…have been designed to facilitate widespread use of Open Banking-enabled products and services in a simple and secure manner. They bring together regulatory requirements and customer insight to create the Open Banking Standard for bothTPPsandASPSPs.”
Before getting too technical, let’s touch on the idea of customer experience and what it means for the open banking use case.
What is customer experience?
We see this phrase pop up in all areas of business, but we rarely take the time to analyse what it actually means. Customer experience refers to the feelings, thoughts and step-by-step journey of a customer when interacting with a brand, product or service. That includes the discovery phase, the consumption and post-consumption periods associated with this process.
In the case of open banking, customers are being presented with a new suite of products that comes with a certain set of rules. If their expectations are not matched by a smooth and seamless experience, customers will simply abandon their journey at an early stage.
What does the customer experience actually mean for open banking?
Customers are being presented with a new business paradigm – they are being asked to give their consent so that their financial data can be shared with third-party providers. The only way they give their consent is if they feel informed, secure and in control throughout the entire experience.
When thinking about the customer experience, it’s important to remember that both managers, businesses and end-users are the recipients of this new reality. Don’t let the name customer experience fool you. The experience is as new and important for all entities in this process.
What is the experience, in this case, you might ask? Experience is what those entities see, do, say and most importantly feel when they are interacting with the service, no matter where they sit in theopen banking lifecycle.
What’s the thinking behind the Customer Experience Guidelines?
This is a project that could have been approached from two different perspectives: the perspective of the regulator, and the perspective of the developer. One approach is more loose, based on the assumption that regulation evolves and changes, while the other is far more technical and rigid.
The optimal approach? A combination of both.
The guidelines were created as a best practice reference guide, a resource where interested entities could turn to for help in order to establish some ground rules. Think of it this way - when buying a new car, you never have to worry about the position of the accelerator or the brake.
Yes, the car is new, and you need to build a sense of familiarity, but you can trust that some things are in the place they need to be.
A more technical approach to the guidelines would restrict application and would lead to the need for frequent revisions. Let’s use Strong Customer Authentication as an example. There are different methods of going about it that are equally effective and compliant. Creating very rigid and prescriptive customer experience guidelines would limit development freedom and flexibility.
What’s more, specific industries come with different needs and requirements. A resolute CEG document could prove problematic for certain sectors.
Customer experience guidelines are market-drivers
What do customer experience guidelines have to do with open banking market adoption, you might ask? They are the barrier breakers, the gate openers for people to start using open banking products and services without any worry or reservation.
An effective set of CEGs gives developers the ability to bring products to market faster. But it’s not just about the delivery of a new product. The CEGs are the reason for the following chain reaction:
- Consumers will trust these products faster
- Consumers will use them more frequently
- Consumers will recommend them to other people
People are not afraid of change, per se. What they love is that the comfort and security that they are used to, works. If a product or service is able to convince them they do something better, people will make the change. CEGs are the mechanism that drives people to make that change.
They are the reason why people who firstly interact with open banking can seamlessly get the job done without any hiccups or roadblocks.
CEGs are a security pillar
When talking about open banking and PSD2, the topics of compliance, API specifications and overall security are hard to avoid. After all, security is one of the main reasons the PSD2 regulation was put together in the first place.
CEGs are yet another element of security within the regulation. How? By getting rid of the “screen scraping” process and establishing a more user-friendly data collection system.
Screen scraping is a data extraction process where information is being retrieved from a website. In the case of banking, TTPs used to access bank accounts on the consumer’s behalf using their credentials. While that process was effective, it was invasive.
Text suggestion: “If you would like to know more on why you should avoid screen scraping services at all costs, here are 5 of the most important reasons.”
CEGs are allowing the consumer to mandate what TPP is allowed to see. That could be a specific section of their data, or even a certain time, such as the last six months of transactional data.
By doing so, the consumer is in control, feeling more secure about what they share with third-party providers. The security of CEGs benefits doesn’t stop there. CEGs also help as an industry best practice, for instance, BSI/ISO standards on cybersecurity or the ethical use of artificial intelligence.
What makes the open banking CEGs so easy to follow?
Any set of new rules and regulations is as good as its adoption numbers. The ultimate goal of any such document is to be read, understood but most importantly, applied in real life. What makes the current set of customer experience guidelines relevant and easy to understand comes down to four different pillars.
Nobody likes the chunks upon chunks of theory. This is a document addressed to developers, to creators and practicality is an essential part of success. Graphs, images, steps, and visual aids come in handy when talking about practicality.
Another important element is finding the right balance between solid instructions and advice. Some aspects come strictly tied to regulation and should be followed scrupulously, whereas others are merely suggestions, best practices and proposals.
A common pitfall of UX design is forgetting functionality and usability when trying to create the best user experience there is. No matter how exciting the journey might be, developers and designers should never forget that websites, products, apps and services should ultimately serve their main purpose, which is to function properly.
Here are some of the issues that are addressed and raised through CEGs:
- What devices are being used to access the service environment?
- How detailed are your target audience personas? Have you considered the physical, cultural and mental differences of potential users?
- Is there consistency, simplicity, and responsiveness throughout the entirety of the project?
CEGs are not meant to prescribe and map out every single step of a user’s journey. What they are meant to do is provide the blueprint developers can use to create their own user journeys.
For instance, basic functions such as setting up an account or registering as a guest, searching for information or contacting the service provider should be detailed in the documentation.
Up to date
There is no way you can avoid updating and reiterating the CEGs. Regulations change, technology advances and the market shifts. The goal is to make them as flexible and relevant as possible to avoid constant overhauls.
ECG documentation should be treated as a living organism, a document that is always under surveillance by reviewers and industry consultants. The moment someone interested accesses the doc and realizes that there is outdated information, the document will lose legitimacy.
As iterated in previous sections, the way you avoid the need for frequent revisions is by describing points of principle and ways of working rather than prescribing solutions.
How can the next iteration of open banking CEGs be improved?
- Practical messages. Normally, a customer is transitioned from a TPP to the ASPSP and then back. This process should be clear, and a user involved should understand what the consent is for and where they are. Redirection screens should clearly state what is going on and why. By utilising effective messaging, a service provider ensures that a user is familiar with the process, consequently generating trust;
- Only valuable information on the screen. Text-heavy screens should be avoided at all times. The most valuable information should be kept short and clear, while ensuring that there are no irrelevancies. By providing a minimal amount of information, TPP ensures that a consumer will read it and comprehend it correctly;
- Additional helpful information. In cases where a user wishes to find out more, the information would be presented at the key point of a consumer journey. It should aid with the process of using/getting the product or service. If presented at the right time, this information may lead to more conversions and revenue increase rather than service abandonment;