Among all aspects on the path to open banking, including improved infrastructure, data and businesses, opening up bankers' minds is the most important, according to a leading executive in the financial services sector.
For years, banks have been reluctant to open up, worried that profits will shrink, said Lei Ming, president of CCB Fintech Co, the tech subsidiary of China Construction Bank Corp, at a forum on open banking on Monday.
"We bankers must change our mentality and change the internal organization of banks so that they will become increasingly open (to third parties)," he said.
"After opening our minds, we'll realize that by opening up (to third parties including financial institutions and fintechs) today, we'll be able to acquire a larger group of clients tomorrow."
Jointly held by aiBank and Baidu Cloud, the comprehensive Cloud service of Baidu Inc, the forum discussed the momentum toward open banking in China. As a direct banking joint venture, aiBank was formed by China CITIC Bank Corp and Baidu Inc, China's largest search engine by market share.
According to an article posted on the website of McKinsey & Company in September 2017, open banking can be defined as a collaborative model in which banking data is shared through application programming interfaces between two or more unaffiliated parties to deliver enhanced capabilities to the marketplace.
Open banking is a major shift in the retail banking industry, giving customers greater control over their data, and creating a new connected ecosystem where banks, fintechs and other third parties collaborate to deliver seamless financial services, said another article published on MIT Technology Review on Sept 28.
"As the online banking business has moved into a new era, bankers must change their mindset. Rather than taking the initiative to build an ecosystem and invite others to join in, a bank should join the ecosystem of others and enter into their major business scenarios by making changes to its business in various aspects including channels, products and technology," said Yang Bingbing, general manager of the e-banking department of China Everbright Bank Co, at the forum.
According to Arthur Wang, partner and head of banking at KPMG China, domestic fintechs selected big data and artificial intelligence, insurance technologies, the internet of things, and supply chain finance as their main focuses of business development this year.
"China has an edge over many other countries in terms of promoting the development of open banking, since Chinese bankers are embracing change with an open mind," Wang said.