I attended an interesting discussion today at the launch event for a new report by Deloitte and TheCityUK on the role for shared platforms in financial services regulation. 

The debate on shared platforms in financial services is heating up. Platforms, in the broadest sense – encompassing people, processes, policies, frameworks and technology – is being looked into, as the business case for it becomes more pressing. Profit pressures, customer expectations around a seamless onboarding and switching experience and the increasing threat of cyber attacks are some of the drivers that are stoking this discussion. From a strategic perspective, firms are moving from using bespoke tech solutions to standardised tech capability (such as the cloud) to better focus on their end products and services. 

Regulation is however still a sticking point, specifically liability and accountability. Lessons from the implementation of Open Banking show that regulation can facilitate innovation, but some thorny implementation issues such as liability are harder to allocate, especially when data passes through multiple hands. The nature of the platform also needs to be determined – for example, a single entity providing a market-wide KYC solution can become a single point of failure and will attract regulatory scrutiny. Lack of international regulatory harmonisation is also a challenge for innovation. 

It is heartening, however, that the debate is moving on. There is a call to the industry to work together to define the platform solution and the market structure required to deliver it. Once this happens regulators and government appear to be willing to consider the enablers that they need to deliver. There appears to be some momentum to take the debate to the next level. Watch this space!

In the meantime, find out how the creation and widespread adoption of shared platforms across the financial services sector could result in an overall net positive economic effect in our special report with TheCityUK