In this series of blogs, I’ve highlighted the top key performance indicators (KPIs) banks should track to measure the success of their open banking initiatives.
My last post was on the KPIs for Business Value and Customer Experience Results in Open Banking. Today I want to dive into another important area – the developer ecosystem, platforms, and the security they contain.
Track developer experience in open banking
In addition to measuring business value and customer experience, it is extremely important to evaluate how the developer community interacts with a bank’s various test and development environments. The following KPIs indicate how well a bank is working with innovation partners and third parties to drive the release of products that appeal to the bank’s customer base.
- The number of developers using the sandbox. A higher number of developers using the sandbox indicates strong developer engagement and positive experience – and can lead to the introduction of the new services to customers.
- The percentage of developers who bring live products to market. As technical skills, documentation, and integration improve, banks can expect this metric to improve. Understanding how long it takes for the developer community to get products to market is equally valuable. “Time to First Hello World” is a common measurement that supports this KPI.
- Onboarding time. The shorter the registration time, the more likely it is that third party vendors (TPPs) and developers will use the bank portal. As part of onboarding, it is helpful to understand how often a bank needs to intervene in the registration. Ideally, onboarding TPPs would not be resource-intensive and the TPPs could interact with the test environments extremely quickly.
- Total number of API offerings. This helps a bank understand how robust their development sandbox is and how quickly developers can move their products into production. The more APIs are available, the more potential services can leverage banking data and add value to bank customers.
Tracking of platform offers in open banking
As banks expand beyond their own services to their clients, they can track KPIs that fuel the connectivity and ecosystem that support the banking platform.
Here are three more KPIs for tracking platform development:
- The number of TPPs in the bank’s ecosystem. This is a measure of how successful the bank has been in attracting PSPs and providing innovative services to its customers.
- The number of TPPs using each API. This sheds light on which APIs are most common in the TPP ecosystem.
- The number of transactions generated per TPP. Banks can get an idea of how valuable each TPP is in generating transactions.
Tracking security in open banking
In open banking, security is not just a regulatory concern, but a problem that guarantees the efficiency and customer satisfaction of the ecosystem.
The top three security KPIs that banks should be tracking are:
- Successful authentication of customers. This metric shows banks how effective the authentication process is for both themselves and TPPs. Possible cases of fraud are also highlighted.
- Successful authentication of technical service providers. In this way, banks can identify potential fraud cases and understand technical challenges.
- The number of fraudulent transactions. Banks can take into account the value saved on behalf of their customers and their own business by understanding how many fraudulent transactions have been stopped using Open Banking services.
Tracking and measuring KPIs for any Open Banking outcome is extremely valuable as it ensures that the bank can meet its larger business and stakeholder obligations. Defining KPIs before entering into new business models, customer experiences and technology transformations will justify the bank in an open banking strategy that will achieve the desired success.
Measuring KPIs is not an easy task – it requires creating basic operational readiness, technology, and data skills that enable the bank to learn from and replicate KPI results. The winners and losers of open banking transformations are determined by the ability to change course and turn when the results show underperformance. The measurement of Open Banking KPIs is a pillar with which banks can be effectively adjusted if necessary in order to continue to be successful as a financial service provider.
We invite you to delve further into this topic by reading our report. Power Plays to monetize Open Banking APIs.
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