Financial Services

Open Banking: connecting retail and banking data

Open Banking: connecting retail and banking data

With the evolving financial technology landscape, Open Banking offers new and innovative ways for businesses to engage with their customers. Frontier was approached by a client in the retail sector looking to harness the power of Open Banking.

This client wanted to explore the development of a product that would let them receive customers' transactional data through Open Banking and integrate it with their existing loyalty program. The initiative could provide deeper insights into customer behaviour and preferences, potentially revolutionising their business strategy.

We worked with the client to navigate the challenges around making the most of customer data, identifying the key questions that would determine the feasibility and potential value of this product. Our focus was on how the new data stream could be leveraged to enhance customer engagement and drive business growth, and how the client would incentivise customers to share this new data in the first place.


Assessing product credibility

As firms innovate it is important to consider the business case for new propositions before they are fully worked up, leading this client to approach Frontier. Our toolkit for assessing a business case has helped previous clients in this area, developed from our understanding about what firms need for their propositions to be successful.

A challenge for our client was that many customer propositions based on Open Banking already exist and most of them are free. We recognised early on that customers were unlikely to pay for the client’s potential proposition. The business case would have to rely on creating a convincing product that encouraged customers to use it in return for sharing their transactional banking information.  

We supported the client in defining the key exam questions we needed to answer to explore this investment case. Would the client get enough value from customers sharing their transactional banking information? And would enough customers choose to use the proposition in return for sharing their data?

First, we needed to understand the nature of the value opportunity for our client from the additional data they could access through Open Banking. There is no doubt that having more information on customers is beneficial to any business, however, exploring in depth what that data would unlock in practice was critical to building any business case for investment. We considered in particular:

  • What information would Open Banking data provide and how incremental it was to what our client already had – or could largely predict with the information it had.
  • How could our client use this information, and to what extent these use cases were incremental to what it already could do.
  • What would we need to believe for this data to be valuable, and what were the key challenges with this.

Secondly, we needed to understand the customer perspective. Our focus turned to the propositions that the data could help develop, aligning to the aims and objectives within our client’s business case.  To fully ensure the credibility of developed products, our analysis also turned to the customers and assessing whether they would find these products desirable enough to share their banking data in exchange.


Turning our toolkit to value

The application of our economics toolkit helped us to answer the above questions for our client, and determine the value of the proposition. We were able to show that it would not be able to deliver the expected value exchange for either the client or their customers, and helped our client avoid a struggle to create a scalable proposition off the back of it.

Frontier have a wealth of experience in supporting clients in financial services and retail sectors, and we can use our toolkit to assess the business case of clients’ ideas and their value opportunity.

If you’re interested in finding more about how we explored these issues and how we helped our client, please contact or call +44 (0) 20 7031 7000.