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Launches new start-up labs in its Camden street offices, Dublin
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Supporting fintech developers to create banking solutions for the future
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Recognises that if banks fail to innovate in the wake of PSD2, they risk it all
Bank of Ireland launched their first start up hub in Galway in 2016, with a follow up launch in New York in 2017. The latest venture is another launch in Ireland, this time in central Dublin. This time, they are throwing their support behind eight Irish fintech start-ups, with space for four more to join the hub. The Head of Group Operations and Payments at Bank of Ireland, Vincent Brennan, is also deputy chair on the Euro Banking Association. In early 2017, the Euro Banking Association produced a white paper covering the application of API and blockchain as options of open banking. It is perhaps no surprise that Bank of Ireland are already ahead of the curve launching a new API service, linking traditional services with fintech as the start of developments to enhance its customers’ experiences.
Open banking is due to arrive through the European Directive and PSD2, which will require banks to share customer data with third parties. This all depends on various permissions that are set by the customer as to what is being shared, but it promises to bridge the gap between alternative and traditional banking while giving more control to the consumer as to what banking information can be shared and with whom. This will also make it easier for fintech to share information with traditional banking services and those banks that embrace this ability are more likely to survive in the wake of new fintech entrants to the market. Brennan noted that while a fintech start up may have a “great proposition”, without having carried out the know your customer (KYC) verifications to appease anti-money laundering regulations, they do not know their customers. This is where the banking system comes in, that holds the records for KYC but does not have the development, skill or ability to innovate as the fintech has.
Over recent years there have been new entrants to the market. If you want to transfer money internationally for example; there are many currency exchange providers who are challenging existing banks; offering transfer rates that are much cheaper than their traditional banking peers; in some cases fee free. They also offer a range of flexible services that fit with customers demands offering mobile apps with significant account control to payments facilitated through Facebook messenger and WhatsApp. Other recent revolutions in fintech include same day trans-Atlantic payments when sending money abroad through blockchain technology and through biometric verification using unique traits such as fingers or smile technology. The advent of open banking and more developments in fintech will lead to an enriched banking experience for customers and support them in their busy lives. Traditional banks need to embrace the wave of fintech start-ups and developments to integrate into their existing services, that will lead to an enhanced service offering that will allow them to remain competitive.
