CarPay-Diem – the absolute open banking use case for innovative retail banks
Open banking is a term that refers to the practice of sharing financial data and services between different parties through the use of application programming interfaces (APIs). This allows customers to access a wide range of products and services from different providers, while also giving them more control over their own data and finances.
The era of “open banking” or the need for banks to redefine themselves
Next to a wealth of opportunities for banks that actually dare seriously explore the topic and grab the opportunity to drive their digital transformation, there’s a lot of confusion and bad connotations. Especially topics like “sharing” (be it data or revenue) and “ROI or scalable use cases” for open banking have been a trigger for reluctance form any banks that never experienced a success story that grew within the bank’s own innovation labs.
“Mobile banking” taken literally
One example of a third-party API that enables open banking is CarPay-Diem, an agnostic service that allows drivers to pay for fuel or e-charges automatically at any participating energy station, directly from their banking app. CarPay-Diem transparently embeds into the banking app and offers the customer a seamless fueling experience while discovering a revolutionary new face of “mobile banking”.
But what's the benefit for retail banks to engage in open banking with CarPay-Diem ? In this paper, we will be exploring advantages, sharing experiences of collaborations with banking partners and illustrating how CarPay-Diem could be the catalyst for your digital transformation with a proven, actionable, scalable and profitable use case –where each single one of the last four adjectives used is applicable literally.
CarPay-Diem successfully works with retail banks and comes with a wealth of experience, existing assets and a track record of successful collaborations. In the following section, we will build the business case for retail banks to adopt CarPay-Diem in their digital innovation strategy and the tangible benefits they can expect.
Banks in Motion
Mobility is one of the most important aspects of modern life, and also one of the most expensive. According to the European Commission, mobility is the fourth largest house hold spending category in the EU, accounting for about 16% of total consumption expenditure. This means that mobility is a key market for retail banks, who can offer various financial products and services to their customers related to their mobility needs and preferences.
However, mobility is also undergoing a significant transformation, driven by technological, environmental and social factors and these new modes of mobility pose both challenges and opportunities for retail banks, who need to adapt their offerings and strategies to the changing mobility landscape.
Retail banks can accompany their customers through their rapidly changing mobility behaviors and play a more pivotal role in their daily mobility spending. One of the ways that retail banks can leverage the potential of the new mobility ecosystem is by embedding technology like CarPay-Diem into their mobile banking app and connecting drivers, vehicles, fuel & EV charging stations and payment processing in a seamless and secure way, creating a frictionless and convenient customer experience. In other words, banks can capitalize on the growing trend of alternative mobility by offering new products and services that meet the needs of their customers.
Secure the payments business against new entrants
Payments are a high-frequency use case, and customers are more likely to have a strong relationship with a bank that provides them with convenient and secure payment solutions. By offering CarPay-Diem as a value-added service, retail banks can reinforce their core business of providing payment solutions and financial products to their customers. CarPay-Diem helps retail banks differentiate themselves from competing actors and new entrants, such as fintech’s and big tech's, that are trying to capture a share of the payment market. By embedding CarPay-Diem into their banking app, retail banks offer a competitive and seamless payment service that leverages their existing infrastructure and customer base.
An augmented mobile banking experience
Banks have a wealth of data about their customers' mobility habits. This is a goldmine for forging innovative revenue streams and enhancing user experiences. Forward-thinking retail banks, when reimagining their digital offerings, discover new income sources and cross-selling opportunities. Weaving third-party-enriched experience into their banking apps, a concept known as Open Banking, empowers banks to deliver unique, customer-centric experiences while maintaining transparency for users.
Such collaboration helps banks to accelerate innovation and develop new products and services that meet the needs of their customers – but with considerably less risk, costs and the need to build knowledge and acquire competences outside the comfort zone of finance and retail banking. But innovation requires scalable, profitable use cases like effective data monetization or leverage of client insights for a better banking experience, competitively priced products, tailored services and overall customer satisfaction.
Banks that have successfully embedded CarPay-Diem took advantage of the expertise and proven technology that helped them improve their own digital capabilities and deliver a profitable and scalable use case within record time.
Bring additional & diversified revenues
This is a relatively high failure rate, but it is important to note that innovation is inherently risky. Banks are constantly trying to develop new products and services to meet the changing needs of their customers and stay ahead of the competition. Some of these innovations will be successful, while others will not. But despite the high failure rate, innovation is essential for retail banks. By developing new products and services, banks can improve the customer experience, increase their market share, and reduce costs.
Banks can reduce the risk of failure by carefully evaluating their innovation initiatives and this is why partnering banks that have successfully embedded CarPay-Diem have experienced an almost immediate ROI because the collaboration is based on a revenue model as opposed than costly developments with uncertain user adoption.
Relevant data on customer demographics or mobility preferences lets partnering banks monetize the insights gained from analyzing their historical data. While banks retain ownership of their data, CarPay-Diem uses trends and insights to direct promotional campaigns at the moment of transaction, so customers benefit from immediate cashbacks and discounts.
