Simon James
Viewpoint

Passive data donor or proactive data seeker – which one are you?

In the new open data era, banks face a series of strategic choices. The big question they face: what sort of business do you want to be?


Open banking regulations in the UK will mean banks have to make their customer data available via digital portals – open APIs – provided the customer has consented. This free-flow of customer data between rival organisations is set to transform the competitive environment in retail banking.

Next year, under these new regulations, businesses will be able to extract and use banking data to power new services targeted at bank customers. So how should incumbents respond?

"There are two main options – they can become either 'passive data donors' or 'active data seekers'," says Louise Beaumont, Co-chair of the techUK Open Bank Working Group.

These two positions imply opposite approaches to the new banking market – and sharply contrasting mentalities. Here's what you need to know:

Passive data donors
  • A bank that choses to operate as a data donor has effectively submitted to a process it can't control – allowing others to extract its data.
  • By not choosing to collaborate with others to develop new propositions the bank is in danger of not realising the value of the data it holds.
  • Banks that choose to engage fully in the new market, based on open data, will focus on collaborating with organisations and pooling data to provide innovative new services for their customers.
Proactive data seekers
  • A bank will succeed by finding the best fit between their data and that held by other organisations, eg, mobile phone companies, energy providers, transport companies and airlines.
  • Forming high-value partnerships with outside organisations is the most effective way for banks to engage in the new banking market that the digital portals will create.
  • The banks with the best-quality digital portals that allow the fastest, cheapest flow of data will be best placed to attract the most innovative partners to work with them.

Deciding to become a reluctant 'data donor' will not stop a bank's customers sharing their data with other service providers in search of a better deal or an improved experience.

"Banks will have no control over this process and there will be no alternative but to release their data. But adopting this approach will also leave banks poorly positioned to engage positively in the new market for consumer and small business financial services that Open Banking will create, and to pursue the opportunities it presents," says Louise.

Simon James, Principal data scientist at Publicis.Sapient, agrees.

"Markets based on open data encourage collaboration and networks of innovative companies that build services using common underlying platforms – for example the ecosystem of developers and partners that use data and technology tools provided by Facebook, Amazon or Google to create new services," says Simon.

"In these systems, collaboration between data owners and service innovators is the norm, and the leaders compete to provide the best environment for innovators to create applications that will attract the largest numbers of users. Crucially in this context, best means most open.

"Choosing to do no more than simply comply with minimum standards for the Open API will make a data donor bank a less attractive partner for collaboration and so reduce its access – and its customers' access – to new ideas developed by others."

Louise Beaumont

"A bank that has chosen to operate as a data donor has effectively submitted to a process it cannot control"

Louise Beaumont

Co-chair, techUK Open Bank Working Group


Simon James

"Choosing to do no more than simply comply with minimum standards for the Open API will make a data donor bank a less attractive partner for collaboration and so reduce its access – and its customers' access – to new ideas developed by others"

Simon James

Principal data scientist

Data is the currency of the future in financial services and becoming a data seeker that forms high-value partnerships with outside organisations is the most effective way for banks to engage in the new banking market that Open APIs will create
Simon James

Principal data scientist

Listen in depth
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(15 sec)

What are the choices banks face in the new era of open data in terms of what kind of business they want to be?

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(15 sec)

How important is data in the future of financial services?

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(15 sec)

What does it mean to be a data donor and what are the business implications of this?

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(20 sec)

What will it mean to be a data seeker and what are the business implications of this?

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(15 sec)

What business mentality do big banks need to adopt during this transformative time?

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