# Lack of partnerships holding back open banking innovation, report finds
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2019-01-16
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: Financial services leaders face major challenge in finding right partners
Meta Description: Discover insights and challenges in building successful open banking partnerships. Read the latest report from TLT to stay ahead in the financial services
URL: https://financedigest.com/lack-partnerships-holding-back-open-banking-innovation-report-findshtml

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_Financial services leaders say finding the right partners is a major challenge_

**As the first anniversary of open banking and PSD2 arrives, a report from law firm TLT finds that partnerships will be key to winning the race to launch successful open banking products.**

**However, the report also finds that selecting the right partners is the second biggest issue faced by financial services companies investing in open banking, affecting more than a third (34%).**

**The study reveals that many significant open banking developments to date have been managed in-house, rather than through collaboration and partnerships, as banks and other market participants work towards [regulatory compliance](https://www.financedigest.com/how-a-zero-trust-architecture-can-help-accelerate-digital-transformation-for-financial-institutions-without-sacrificing-regulatory-compliance.html "How a zero trust architecture can help accelerate digital transformation for financial institutions without sacrificing regulatory compliance") and proof of concepts. Looking forward, it finds there will be a significant upswing in partnerships and collaborative projects as the market matures.**

The report – [_Opportunity Knocks_](https://www.tltsolicitors.com/insights-and-events/publications/open-banking-opportunity-knocks/) – is based on **the views of 130 senior decision makers across the UK financial services sector including banks, building societies, challengers, fintechs and payment service companies.**

**Partners of choice**

Though in-house development has been popular so far, TLT’s report reveals how many different types of [open banking collaborations](https://www.financedigest.com/why-open-banking-heralds-a-new-era-of-ecommerce-merchant-and-bank-collaboration.html "Why Open Banking Heralds a New Era of eCommerce Merchant and Bank Collaboration") are already occurring. Banks are partnering with external consultancies and [technology providers](https://www.financedigest.com/is-your-technology-provider-holding-you-back.html "Is your technology provider holding you back?") (32%), outsourcing services (28%) and buying in technology via service agreements and white-labelling (16%).

Non-banks are also partnering with external consultancies (39%), buying in technology (13%) and outsourcing services (10%).

Just 7% of banks and 4% of non-banks have so far obtained technology by corporate acquisition, but the majority (67%) of companies believe the market will become more consolidated, as larger companies look to buy smaller ones to remain competitive and [keep up with the pace](https://www.financedigest.com/winning-the-security-race-how-financial-services-can-keep-pace-with-cybercriminals.html "Winning the security race: how financial services can keep pace with cybercriminals") of change.

**The challenge to identify the right partners is set against a backdrop of increasing competition and mounting pressure to quickly identify the right open [banking strategy and move on it. A significant 84% of companies now have new open banking products and services](https://www.financedigest.com/the-future-of-financial-services-how-apis-are-fuelling-the-rapid-rise-of-open-banking.html "The future of financial services – how APIs are fuelling the rapid rise of Open Banking") due to launch or in development, many of which will come to market during 2019.**

[**David Gardner, partner at TLT, says**](https://www.tltsolicitors.com/people/david-gardner/) **:**

Collaboration is critical as the open [banking market](https://www.financedigest.com/the-stem-cell-banking-market-to-keep-up-the-digitized-momentum.html "The Stem Cell Banking Market to keep up the digitized momentum") matures, because the core proposition favours input from multiple parties. Established players offer extensive [customer reach](https://www.financedigest.com/uk-and-eu-reach-post-brexit-customs-deal-for-n-ireland-the-times.html "UK and EU reach post-Brexit customs deal for N.Ireland-The Times"), resources and experience, while new providers bring exciting new ideas, technology and techniques to the table, including data-driven insights into customer behaviour. When they work together, different players can maximise their respective strengths, [creating new products](https://www.financedigest.com/probiotic-soda-market-product-innovation-by-live-soda-and-lifeway-foods-to-create-exciting-growth-opportunities-reports-by-fact-mr.html "Probiotic Soda Market: Product Innovation by LIVE Soda and Lifeway Foods to Create Exciting Growth Opportunities, reports by Fact.MR") that are more than the sum of their parts.

Much of the focus in 2018 was on compliance projects – particularly for the banks – and proof of concepts, but we are now [moving into a new year with far more collaboration and customer-facing innovation](https://www.financedigest.com/the-next-upcoming-years-to-move-mri-guided-focused-ultrasound-devices-market-beyond-cliched-roadmap-with-innovations-between-2018-2026.html "The Next Upcoming Years To Move Mri Guided Focused Ultrasound Devices Market Beyond Clichéd Roadmap With Innovations Between 2018-2026") on the horizon.

Choosing the right legal and commercial model for partnerships and clearly documenting the parties’ responsibilities – particularly in key areas such as IP rights, data management and regulatory permissions – is vital to establishing a successful relationship, which allows the parties to realise their commercial objectives while [managing](https://www.financedigest.com/risk-management-redefined-navigating-post-covid-disruption.html "Risk Management redefined: navigating post-COVID disruption") legal and reputational risks.”


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