Open banking and the regulatory environments driving it are forcing financial institutions to become a platform business. However, there are 4 such platforms for financial institutions to consider:
- Proprietary platforms use open APIs to make data accessible to developers and to offer finalized products to consumers.
- Joint venture platforms encourage collaboration among sponsors (such as FinTechs) to create and control a shared interface.
- Licensing platforms enhance network effects by using a single sponsor and a variety of providers to bring a visible interface to producers and consumers.
- Shared platforms have no single controller for development, instead allowing multiple parties to bring the interface to producers and consumers.