Old Data Systems: Why They Hold Businesses Back

Legacy financial institutions are constrained by outdated, fragmented data architectures that hinder innovation, increase costs, and erode competitiveness. The consequences span across economics, customer experience, compliance, and future growth potential.

Key Pain Points:

• Data Silos – Fragmented databases block integration, insights, and third-party collaboration.
• Higher Costs – Institutions with silos face 20% more costs; onboarding is 7x more expensive without digital identity systems.
• Lost Opportunities – Lack of alternative data excludes 1 in 5 potential borrowers.
• Weaker Competitiveness – 75% of customers prefer fintechs for better digital experience
• Innovation Gap – Siloed data hinders AI, personalisation, and new product development.
• Compliance Burden – Fragmentation complicates GDPR requirements and raises audit risks.

Without integrated data foundations, legacy financial institutions face rising costs, weakened competitiveness, and mounting compliance burdens, while fintech challengers accelerate ahead through data-driven innovation.

How Open Data Strategies Create Sustainable Competitive Advantages

Open data adoption redefines financial institutions, enabling them to move from siloed service providers to ecosystem participants that unlock innovation, partnerships, and new revenue streams.

• Ecosystem Participation – Banks integrate with fintechs, payment processors, and third parties to deliver broader customer solutions.
• Revenue Diversification – Data monetisation (e.g. anonymised insights) generates new income streams beyond traditional products.
• Customer Experience – Unified data platforms enable real-time personalisation, predictive analytics, and seamless services.
• Operational Efficiency – Automated processes and integrated architectures reduce costs, compliance burdens, and manual interventions.
• API-First Design – Data sharing is treated as core infrastructure, enabling secure, compliant, and flexible integration.

Open data turns financial institutions into collaborative, data-driven platforms boosting customer value, efficiency, and growth while securing long-term competitiveness.

Secure APIs: Making Data Sharing Safe

Effective open data implementation requires robust infrastructure that balances accessibility with security. Financial institutions need API-first architectures that embed authentication, monitoring, and security controls directly into data-sharing protocols.

‍Authentication and authorisation frameworks are central to secure sharing. Protocols such as OAuth 2.0, mutual TLS, and MFA, combined with dynamic token management and granular access controls, prevent unauthorised use while supporting trusted partnerships.

‍Data encryption and integrity protection safeguard information in transit and at rest. End-to-end encryption, digital signatures, and tamper detection ensure compliance and preserve trust throughout the sharing lifecycle.

‍Real-time monitoring and threat detection provide continuous oversight. AI- and ML-driven tools flag unusual access patterns, enabling swift incident response while maintaining audit trails for compliance and forensic needs.

‍Vendor-agnostic integration ensures flexibility and resilience. By supporting multiple security providers, API-first designs let institutions adapt quickly to evolving threats without being locked into a single technology.

Why Is Good Data Management Important for Rules and New Ideas?

Successful open data strategies require robust governance frameworks that enable innovation while safeguarding compliance. Institutions achieve this through automated data classification that applies appropriate protections based on sensitivity and regulation, and consent management systems that give customers visibility and control over data use. Real-time consent tracking and easy revocation tools not only ensure compliance with GDPR and FiDA but also strengthen customer trust.

‍Equally important are automation and cross-border governance. AI-powered monitoring and real-time dashboards help identify compliance risks early, while automated reporting and predictive tools reduce manual workload. For global institutions, jurisdictional mapping and automated compliance verification allow safe data sharing across borders. Together, these capabilities create a governance foundation that supports growth, protects customer rights, and maintains regulatory confidence

How Data Monetisation Creates New Revenue Streams Without Compromising Privacy

Strategic data monetisation enables financial institutions to create significant new revenue streams while safeguarding customer privacy and ensuring regulatory compliance. By leveraging both direct and indirect approaches, institutions can unlock business value, improve efficiency, and strengthen customer trust.

Key Strategies‍

‍Indirect Monetisation – Use predictive analytics, dynamic pricing, and personalised service delivery to optimise operations, boost efficiency, and increase customer lifetime value without external data sharing.

‍Anonymised Insights – Generate revenue by offering aggregated analytics and market intelligence to governments, partners, and research bodies through subscription services or custom research projects, all while protecting customer identities.

‍Embedded Analytics Platforms – Provide business clients with subscription- or usage-based access to advanced analytics tools for risk assessment, market analysis, and decision-making support.

‍Ecosystem Partnerships – Collaborate with fintechs, technology providers, and industry platforms to create mutual value, sharing revenue from data-enabled services and customer interactions.

Responsible data monetisation transforms financial institutions into ecosystem leaders driving innovation, unlocking sustainable revenues, and strengthening competitiveness while upholding trust and compliance.

Why Do Flexible Platforms Help Prepare for the Future?

Financial institutions need vendor-agnostic open data platforms that ensure flexibility, minimise dependencies, and uphold security, compliance, and performance. This allows data strategies to evolve without costly system replacements or lengthy migrations.

Modular architectures use standardised interfaces to integrate multiple providers while maintaining unified governance and security. Institutions can adopt best-of-breed solutions and adapt quickly to new business and regulatory demands.

Standards-based integration with protocols like OpenID Connect and OAuth 2.0 enables secure, seamless interoperability. This reduces complexity and accelerates service deployment without heavy custom development.

Scalability and performance are achieved through cloud-native architectures with elastic scaling, load balancing, and distributed processing supporting growth without compromising security.

Future-ready frameworks allow integration of emerging technologies such as AI, blockchain, and quantum-resistant encryption through extensible, modular designs, ensuring long-term platform relevance.

How Open Data Excellence Drives Trust, Growth, and Market Leadership

Comprehensive open data strategies provide competitive advantages that go beyond operational efficiency, positioning financial institutions as market leaders through stronger customer relationships, improved performance, and expanded opportunities. Institutions adopting these strategies report measurable improvements across customer, operational, and regulatory dimensions.

‍Customer trust and loyalty are key benefits, as transparent data practices foster deeper relationships and differentiation in competitive markets. Customers show greater loyalty and higher adoption when they have genuine control, driving revenue growth and market share gains.

‍Operational excellence follows from integrated platforms that enable real-time decision-making, automated compliance, and streamlined processes. Institutions report up to 70% fewer manual compliance tasks, 90% better fraud detection, and 50% faster product development cycles, delivering both cost savings and service improvements.

‍Market expansion and innovation accelerate as robust data sharing unlocks new business models, advanced analytics, AI applications, and partnerships. This enables institutions to serve underserved segments and create innovative financial products.

‍Regulatory leadership emerges when institutions go beyond minimal compliance. Proactive adoption signals responsibility and innovation, influencing regulator perception, easing approvals, and strengthening long-term competitive positioning.

Open Data: Why Starting Today Matters

The window for proactive open data leadership is rapidly closing as regulations tighten and competition intensifies. With the European FiDA framework set to take effect in 2027, comprehensive data sharing will become mandatory, while customer demand for seamless, personalised services continues to grow. Financial institutions that delay risk rising compliance costs and lasting competitive disadvantages, whereas those acting now can secure long-term advantage. Success depends on modernising technical infrastructure with secure, API-first architectures, embedding governance frameworks that balance compliance with innovation and trust, and cultivating strategic partnerships that enable ecosystem participation. Open data is not merely about regulatory compliance it defines the future of financial services, determining which institutions will emerge as transformation leaders and which will be left behind.

‍

Ready to explore how Open Data in Fintech: Balancing Rewards & Risks can transform your business?

Book a Strategy Call →