Citizens Bank Explores Open Banking

by on Aug 01, 2018

Corporate Insight recently attended the Citizens Challenge, a hackathon sponsored by Citizens Bank in partnership with the Open Bank Project at District Hall in Boston. The three-day event invited participants—ranging from coders to entrepreneurs—to improve customer experience by building an app with application programming interfaces. Enabling developers to access data through open APIs is a central principle of open banking, which is already widespread in Europe, in large part due to E.U. mandates. Banks in the United States, however, have lagged in adopting such principles, even as potential competitors in other industries—such as Amazon—use APIs and other technology to set new standards for user experience. Recognizing the potential for radical changes to the industry, Citizens Bank hopes to get ahead by exploring the principles of open banking early.

To that end, the bank built several APIs in a test environment—which could access fabricated customer data ranging from account information to transaction metadata—for participants in the event to build solutions along one of four “tracks.” Both consumer and commercial tracks focused on improving engagement, though with contrasting emphases: the two commercial tracks sought to help clients actively manage their finances whereas the consumer tracks sought to help customers better manage their money in ways that might decrease the number of times they have to log in—a common metric used to assess engagement that the consumer team noted as flawed—by increasing the quality of each log in.

As presented by the commercial team, the 360° Engagement and Liquidity Crystal Ball tracks tasked participants with building business-focused platforms for proactively advertising products and delivering related solutions to clients. For the former, Citizens wanted to consolidate information from internal and external data streams to build comprehensive client profiles, from which it could proactively offer products and services to meet particular needs. The latter, meanwhile, tasked developers to help clients understand their cash-flow and grow their deposits with predictive analytics while also providing the bank an opportunity to reach out with relevant products and services.

On the consumer side, two tracks focused on improving the firm’s engagement with its customers. The first track, AI and Digital Engagement, sought to analyze spending habits and other financial patterns to provide timely and actionable alerts. For example, the bank wants tools that could recognize the first charge from a service that offers a free trial period—such as Netflix or Hulu—and then message the customer, asking if they meant to cancel the service while it is still be possible to do so. For the second track, dubbed Social Banking, Citizens challenged participants to use data profiles to personalize engagement with consumers, particularly in the crucial on-boarding phase.

Without regulatory instigation, it may take some time for banks in the U.S. to widely adopt open banking principles, despite the use of open-source APIs in other industries and their potential to improve the customer experience. Yet by exploring the concept early through events like the Citizens Challenge, the bank will be better prepared to compete if such principles become standard. Beyond exploring open banking and viewing potential solutions to the tracks they provided, Citizens Bank also leveraged the event to recruit talent for a new campus opening in Johnston, Rhode Island later this year.