BCG's Anand Chawra shares the secret to riding the open banking wave

He says incumbents have to resist jumping into copycat initiatives.

Anand Chawra, a core member of the digital and technology practice at Boston Consulting Group, is armed with deep expertise in business & technology strategy, large-scale digitisation, as well as bionic transformations, AI, advanced analytics, and Agile@scale. He works with clients in the banking & finance, telecom, consumer and industrial goods sector across the Asia Pacific region.

He is a board member of ZINC Foundation (Zero Invisible Children), a blockchain-enabled identity initiative in partnership with the Dutch Red Cross (Netherlands), and he is active in numerous digitisation and bionic banking transformation initiatives currently supported by BCG.

Anand holds an MBA Hons. from Ecole Nationale Des Pontes Et Chausses, Paris.

Asian Banking & Finance had a quick chat with Anand as he discussed some conflicting opinions about open banking, as well as a way for incumbents to succeed in this growing ecosystem.

What would you say are the best practices and digital strategies deployed by the region's digitally dominant banks? Where does open banking fit in this agenda and how should banks capture the opportunities from this growing ecosystem?
Most retail banks assert they are "open" to open banking. In several markets, regulations have forced them to be. In other markets, fintech innovation is driving the trend. But what counts for being open varies. Too many banks remain stuck in a tactical mindset focused on compliance and on fending off risk of disintermediation.

Yet a few retail banks (especially the ones in this region) view open banking differently. They believe it offers more opportunity than risk, so they are embracing it with bold plays centred on strong third-party relationships and innovative business models. They recognise that creating an open-banking ecosystem creates tremendous opportunities for improving overall customer experience and that third-party partnerships will be a source of competitive advantage.

Can you give us a glimpse of what you will share at the ABF Digital & Open Banking Conference 2019?
I will be discussing a winning strategy for open banking. BCG data shows that open banking has the potential to add or erode retail banking revenues by 15%-25%.

Therein lies the real threat to established players. Although some industry observers point to fintech's disruptive potential, the real disruptive force will be generated by incumbents that seize the potential of open-banking ecosystems to create long-term differentiation and growth.

Succeeding with open banking requires retail banks to avoid the temptation to jump into undifferentiated copycat initiatives. The banks that execute well-rounded and far-reaching strategies will build important channels for growth. Those that ignore the market's direction, permitting the bold and fast-moving banks to widen the performance gap, will find themselves disintermediated, out of pocket, and eventually, perhaps, out of business.

The ABF Digital & Open Banking Conference 2019 will take place on 22 October in Singapore. To learn more about the event, click here. To register, click here. For inquiries, you may contact [email protected] or at +65 3158 1386 ext 212