Until 2018 all banks have to establish an open standard for application programming interfaces (Application Programming Interfaces, API) that gives the client the chance to manage their accounts at different institutions with one app on the smartphone. As it is pretty a progress to get a technical support from our regulators, but it opens the door for some not so welcome friends, the transparency and the domino effect.
Transparency goes wild
The API gives the client the opportunity to integrate all his bank accounts into one application, compare the conditions, also with institutions with which no contract is in place already, and switch money between the different accounts and banks. That is much more efficient than today as I have at least 4 banking apps on my smartphone. But that means also, that the application administrator has full transparency over my financial capabilities. And guess what who will join the road of transparency?
At first we will have all the shops selling you the expensive stuff. It’s much better than Schufa and much faster. In a first step they will demand to have some or your funds on a secure deposit where nly thy and you together have access. In a second step they will declare the right to access your app on their own in case of late payment and grab your funds. That’s what real transparency means for them!
And then we have the government. As it is so much easier to have the same understanding from comprehensiveness with sharing the application, you will never have the problem to pay late your taxes. By the way, who guarantees that we no bank does have a look back into your pocket and getting also the comprehensive view on you?
Welcome to the domino effect
I am always with the digitalization as a real driver for new efficiencies and if one can do something, one should do it. But with such a open system I have a real problem with such a source of infection. If one of the banks has a problem with data protection all others have a problem with data protection. Or if one provider of one of the components has an issue with data protection, all have an issue with data protection. This goes that far, that if today one of my banks has a issue and unfortunately I would not receive my money, other options are there to survive. With this connection, there is no other source of liquidity. So maybe I do not understand perfectly everything or I see it to risky, we will see
Always forward or way back
We will see if my fear is suitable or if everything goes the smooth way. Hopefully there will not happen anything such gigantic, that the clients go back to the cash money. Then we will be faster back in history as we can imagine tody...
Yours K-Street6 team