FinovateFall 2024: Open banking and AI set the stage for financial innovation
When banking, fintech and finance leaders gather in New York at one of the leading fintech conferences, FinovateFall, on September 9-11, two broad topics will dominate the agenda: how new regulations and the proliferation of behavioral data is enabling the age of open banking, and how artificial intelligence (AI) and machine learning can accelerate new product development, improve the customer experience and boost profits.
Just as we expect streaming entertainment apps to offer us personalized choices, consumers and businesses today demand more digital, personalized services from their financial institutions. For decades, banks and financial institutions operated on closed ecosystems: in-person relationships were key, data was sequestered in core banking and card systems, and third-party data came from credit bureaus.
That’s been changing recently as more businesses and consumers embrace open banking, both in response to fintech innovation and evolving data and privacy regulations. Today, application programming interfaces (APIs) enable third parties to offer services that complement bank services. In addition, new rules give consumers more control over their data and its use. These circumstances are combining to fuel a revolution in financial services.
A critical topic at FinovateFall will be how financial institutions can adapt to new Consumer Financial Protection Bureau (CFPB) rules, expected to be finalized in the coming months. The new regulations will formally establish the U.S. rules for open banking. Mastercard’s Head of Data Access and Business Development for Open Banking Ben Soccorsy will speak about how all this paves the way for a bold open banking future, discussing the opportunities posed by the new rules and how banks should address them to become a data recipient, enhance customer experience, drive innovation and, ultimately, boost profits.
New research emphasizes the importance of open banking
Both businesses and consumers have welcomed open banking. According to a forthcoming global Mastercard research report set to be published in September 2024, embracing open banking will be crucial to both business-to-business partnerships and maintaining consumer relationships. Among B2B survey respondents, 92% said using AI to safeguard consumer data and streamline processes is an important consideration when selecting open banking partners. Businesses also hope that open banking can improve their profitability (69%), boost their revenue (66%) and increase productivity/efficiency (65%).
Mastercard’s Senior Vice President for Open Banking Network Services Ryan Beaudry also speaks at FinovateFall, discussing how AI and machine learning can improve such things as account-to-account payments. That’s crucial because 80% of U.S. consumers already link their financial accounts and 66% are likely to connect their bank accounts to an app or service in the future, according to the 2024 Mastercard survey.
The same survey also found that how financial institutions handle data and open banking is important to consumers. Indeed, many of the features that attract U.S. consumers to engage with a financial services company—efficiency, convenience, security and privacy—are driving open banking innovations.
Asked to name the top considerations when choosing which financial institutions to do business with, more than 90% of consumers said their top four priorities were: keeping their data secure, a convenient customer experience, greater control over how their data is used, and the ability to process transactions quickly.
Once again, FinovateFall brings together thousands of senior decision-makers from financial institutions, fintechs and the investing community. With consumers and businesses becoming more digitally savvy and hungry for new innovations in how they interact with their finances, start-ups and public companies alike will show off their latest products and innovations.
As keynote speaker and customer experience strategist Ken Hughes said ahead of the conference, “We are in a perfect storm of change, and we need to ensure that the financial services of today are fit for the customer of tomorrow.”
If you’re at FinovateFall yourself, make sure to meet up with our open banking experts or reach out to them directly with any questions about your open banking opportunities. You can also visit our home for everything open banking and deep dive into some of our inspirational use cases.