Under open banking, financial institutions will have to adopt customer loyalty solutions in order to stay ahead of competition.
One in two UK consumers would be happy to use open banking and share transaction data with third parties if they are offered a more personalised service, a recent study has found.
One in three would be happy to use banking services from technology companies because of the personalisation they offer, it said.
The study said UK banks that missed January deadline for open banking are now facing the end of their extension period and the deadline for HSBC and Nationwide to implement compliant payments functionality will also end in February 2018.
So far, established financial services providers have relied on large, static customer bases. However, with the implementation of open banking, customers will be able to allow third-party access to their accounts and financial data, facilitating tech companies to offer direct financial services and providing increased visibility to consumers.
According to the study, open banking is expected to change the rigid rules of the game, make the financial services market more transparent and put new and established service providers on an equal footing.
While new players are likely to attract customers by offering better deals and ultra-personalised service, established providers will be required to communicate in an increasingly personalised way to prove that they are making efficient use of the data they hold.
Furthermore, the study said that under open banking, financial institutions will have to adopt customer loyalty solutions to stay ahead of competition and smart and precise communication alone could create such a relationship between a bank and its clients.
Relationship marketing hub Optimove CEO Pini Yakuel said: “Banks and financial services providers will have to focus on giving the best possible value to the customer, to stop them switching to their competitors. Offering highly tailored communications will be key to this.
“Financial services firms will be looking at their existing data to find out what value means to each person, and adapting marketing strategies in an emotionally-intelligent way to make every customer feel special.
“Consumers are likely to see an increasingly personalised experience, as old and new financial companies move to distinguish their brand with promotions and rewards tailored to each individual, like retailers.”