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By Lee Kyung-min
Banks are rushing to embrace "open banking," a new financial data management and operating system that will go into effect in October, in order to get the upper hand in the rapidly-developing area.
Open banking is a comprehensive joint payment system based on an application programming interface (API), an intermediary program that enables various software to interact.
Under the new system, fintech firms will get broader access to financial data, and customers will be able to transfer cash using any app operated by any banks or fintech firms.?
Given fintechs will provide far greater services in user interface (UI) and user experience (UX), traditional market players ― mostly banks ― are under growing threat of being reduced to a mere developer and seller of financial products.
UX focuses on how something works and how people interact with it, and UI on the look and layout.
Woori Bank has included key open banking functions into WiBee Bank, its online platform which will be strengthened as a comprehensive marketing and distributing channel of new financial products.
The functions include showing search results of key data on loans, foreign currency exchange requests, overseas remittances and cash wiring records.
The bank's newly opened website enables fintech workers to share data in order to develop new financial products.
KB Kookmin Bank has updated its online platforms Liiv and Star Banking in a move to maximize customer convenience.
The user interface was strengthened to improve the overall layout with options to customize fonts, displays and other frequently used functions.
Also added was a mobile certification system that helps faster user identification in a mobile transaction, a much easier way compared to time-consuming previous process mediated by state-certified entities.
"We consider the update as a must because customers will easily switch over to other service providers once they encounter problems such as delays or complicated operating systems," a KB Kookmin official said.
The collective efforts are inevitable because the new system will make it easier for bank customers to switch over to digital platforms offered by fintechs with better, faster, more user-friendly interfaces.
More efforts will be made in what is likely to be a much-heated competition in the months to come, given data managed by each financial firms are no longer an asset without value-added customer services.
"Now that data sharing has become a new normal, access to data itself is no longer a strength. Traditional financial services firms will have to cooperate with fintechs to provide services that best meet customer needs," a researcher with the Korea Institute of Finance said.
The Financial Services Commission's initiative to implement the "open banking" system seeks to boost tighter integration among various industries that could help better serve the public involving issues including but not limited to financial transactions.
The financial regulator said it will also help people stay more connected and have their needs fulfilled in a more prompt and efficient manner.
