Trends in Open Finance: A Conversation with MX and CapitalG

Jill Greenberg Chase, vice president of enterprise investments at CapitalG, sat down with the new interim CEO and president of MX, Shane Evans, to get his take on the future of Open Finance and the trends impacting consumers, data providers, and data recipients.

Here are the trends they discussed: 

For consumers, they want: 

A more unified and complete picture of their finances. In fact, 90% of people said it would be valuable to see their finances in one place; however, only 40% said they could currently do it, according to an MX survey.

Better insights into their finances. Two-thirds of consumers expect their bank or credit unions to know, understand, and reward them. But only 34% of consumers feel their bank or credit union treated them as individuals, according to Salesforce.

A more secure and reliable experience with their money. More than 80% of consumers in North America connect their bank accounts to fintech apps and 90% use online and mobile financial applications to manage their money, according to Mastercard’s The Rise in Open Banking report.  

For data providers, they are: 

Updating their closed, legacy systems so they can innovate faster.  According to the World Fintech Report, only 21% of banks say their systems are agile enough for collaboration. Data providers are looking for ways to innovate faster and provide better experiences for their customers.

Updating risk models to improve the loan approval process. More than 60% of consumers expect to be able to prove their identity digitally. If asked to move out of digital channels (such as visiting a branch) during the account opening process, only 21% said they would eventually complete the added steps, according to research from FICO. 

Identifying new revenue streams and profit models. Only 6% of banks have achieved their desired return on investment from collaboration, according to the World Fintech Report. 

For data recipients, they are: 

Solving new use cases and innovating faster. Global fintech funding reached a record $621 billion in 2021, according to the CB Insights 2021 State of Venture Report. 

Looking for a more secure and reliable way to connect to financial data. The No. 1 reason fintechs fail is because they can’t connect to the data they need to power their business

Looking to build better relationships with their data providers. More than 70% of fintechs say they don’t see eye-to-eye with their bank partners and are frustrated with banks' process barriers, according to the World Fintech Report.

Across the board, consumers, data providers, and data recipients all want better, faster experiences. When it comes to opening an account, applying for a loan, or initiating payments, consumers expect it to be immediate, easy, and embedded into everyday experiences. However, as one example, only 70% of the institutions surveyed in a 2021 Digital Banking Report indicated that the entire online account opening can be done without coming into a branch. 

MX believes that modern connectivity to financial data is the foundation for solving these challenges, increasing innovation in the financial industry, and enabling long-term financial health for consumers. 

Our vision is a more connected, frictionless, and secure financial ecosystem. One that puts the customer experience at the center. One where transferring funds, applying for loans, or making a payment is instant and embedded. That’s the future of open finance. 

Watch the full MX Forum replay with Shane Evans and Jill Greenberg Chase.