Make sure to watch the video on the banking stack first: https://youtu.be/zno-JAGn4KQ Open Banking is quickly becoming a reality in many countries around the globe. The advantages for bank clients are clear: for example more choice on digital banking offers, personal financial management, multi banking, or faster loan and mortgage approvals. Technically, Open Banking is based on API technology and allows clients to ask their bank to share their financial data conveniently, safely, and securely with Fintech companies. But in this blog, we want to look at Open Banking from the bank’s perspective. In the past, the open banking strategy of banks has been focused on regulatory compliance to avoid fines for non-compliance, pre-empting pending regulation in Open Banking, and avoiding the threats of open banking. Now, banks increasingly start to embrace the opportunities of Open Banking. There are many reasons for this change in perspective, ranging from the push in digital transformation provided by the COVID-19 pandemic, over changing client needs and expectations with regards to seamless and convenient digital experiences, to the many successful applications of Open Banking by pioneering banks. Since Open Banking has moved away from the area of "check-the-box compliance” and into the area of innovative opportunities, it has also become a topic of strategic interest. Open banking encourages competition and provides a mixture of challenges and opportunities for incumbents. Banks that can translate the opportunity of open banking into a clear strategy will be in the best position to start realizing its benefits. Here are some reflections on how to get there. We explore six different Open Banking Strategies, classified along two dimensions (1) and (2) that traditionally have had high importance to banks: (1) Ownership of the customer interface, on the x-axis. The customer interface can be either owned internally (by the bank) or owned externally (by a Fintech). (2) Origination of banking products, on the y-axis. The banking products can be provided internally (by the bank), externally (by a Fintech), or it is a mix where external Fintech products extend the internally available product portfolio. As a result, we get a 2x3 matrix of strategy options for open banking. In the traditional model, banks own the digital value chain and the customer interface. There are two options: (A) If banks stick to their existing digital channels and don’t innovate, the might send customers into the arms of digital banks, neo banks or a bigtech banking offer. (B) If banks develop several new digital offers themselves in order to satisfy increased customer demands and expectations, costs may be skyrocketing, innovation risk may be high, while they are still not able to fulfill all digital needs of their customers. In the plug-and-play strategy, banks extend their product portfolio with optional & complementary Fintech products. They keep the customer interface under their control and distribute the mixed product portfolio to their own customers. The model has an attractive trade-off with limited costs for the banks, low risks shouldered by the bank, and it still allows clients to get the digital solutions they want. In the Open Banking model, those digital products are offered to clients in collaboration with a Fintech. Open Banking provides a moat for incumbent banks, allowing them to ward off attacks by digital bank, neo bank or a bigtech banking offers. In the Banking-as-a-Service (BaaS) strategy, banks distribute their financial products via Fintechs and thus have the role of a supplier to the Fintech. The customer relationship to the end-user is not owned by the bank any more - but by the Fintech. This means, that from the end-users’ perspective the bank is (almost) invisible and they only interact with the Fintechs. In the Banking-as-a-Platform (BaaP) strategy, banks run a multisided platform in addition to providing classic banking services. One side of this platform represents the bank's regular clients. The other side of the platform is made up of a set of Fintechs, which have integrated with the API of the bank. In the Consumer of Banking-as-a-Service (BaaS) strategy, the organization is an API consumer and uses a banking product offered by another player. Typical consumers of BaaS APIs are non-banks that provide a tailored digital banking experience to a niche market. In the pure marketplace strategy, the organization is nothing more than a broker of banking products. Think of it as the operator of a shopping mall, instead of the operator of a single shop. It is a thin layer between API consumer and API provider.