The OpenWealth Association – including aixigo – was featured in the Forbes article Open APIs And What They Mean For Banks & Family Offices. In this article Francois Botha points out how the adoption of open banking and some finance principles and practices enable banks to remain relevant for the family office business. The subsequent text outlines the main findings from the article.
A mere decade ago almost all ultra-high net worth individuals (UHNWI) and family offices conducted all of their financial transactions through a single bank. Nowadays, they spread their wealth across multiple organisations. Multiple banking relationships have become commonplace. As a result, banks find themselves in a highly competitive environment, where remaining relevant represents a significant challenge. However, fragmentation of relationships also made it difficult for UHNWIs and family offices to obtain a holistic personal balance sheet overview. This presents a unique opportunity for financial institutions. The adoption of open banking can help them to master the challenge to stay relevant in the family office business.
Open Banking, which provides third-party financial service providers access to individuals’ financial data by using application programming interfaces (APIs), has the potential to revolutionize the industry entirely. Banks that adopt open banking will not only appeal better to next-generation wealth owners but also be able to strengthen customer relationships and retention and will become an integral part of their financial management process. Those who become early adopters of open banking and facilitate intuitive digital outputs will initially have a competitive edge and will set standards for the industry. Beyond, open finance will also allow creating additional revenue streams through the creation of new, cutting-edge integrated services and partnerships.
In that sense the OpenWealth Association recognised the immense potential of open finance and “was formed to define, maintain and operationalize the Open API standard for a global wealth management community”. The association enables a global wealth management community to cost-efficiently collaborate with an ecosystem of Fin- and WealthTechs, but also with companies and services beyond financial services. OpenWealth also brings immense benefits to family offices. It allows them to move away from manual asset aggregation in Excel, increasing efficiency and reducing operational costs. It enables them to consume real-time banking services easily and cost-efficiently and to best serve their customers without tying themselves to a custodian bank. They can connect to an ecosystem of WealthTechs and platforms that offer services relevant to wealthy families even beyond financial services such as mobility, education or entertainment.
To conclude, open banking initiatives enable a democratisation of banking connectivity for all customer segments and an increase in efficiency for all parties involved: Family offices, banks and software providers.
Discover the mission of the OpenWealth Association: https://openwealth.ch/.