As I dive deeper into the world of open banking, I get the impression that while PSD2 was a game-changer for some organisations, its impact has been varied across the industry. Success isn't just about technology; it's about understanding customer behaviour and finding the sweet spot where business ambitions align with user trust.

As this interview unfolded, it became clear that both businesses and consumers must benefit for open banking to succeed.

Welcome, Bartel Braeckman. According to your LinkedIn profile, you've been the Head of Department Open Bankinsurance at KBC Bank for more than five years. That's quite a feat, especially given that you've been working on Open Banking, and Open Insurance for much longer, which gives you a very good view of where we stand with Open Banking. I think we're now 10 years after PSD2.

Looking at Open Banking today, do you consider it a success, or is it below expectations, or below the initial expectations we had ten years ago?

Thanks, Rik, for having me. I've been involved with Open Banking for quite some time now. Previously, my focus was mainly on payments-related aspects. However, a few years ago at KBC, we began approaching it from a more comprehensive perspective. So now I'm focusing on mobility-related Open Banking cases and things that are evolving. In the meantime, my view and my knowledge on the specific topic have a little bit of a flaw.

What do these responsibilities mean concretely? Responsible for mobility? Is that from an insurance, leasing, or parking arm, or is it more from public transport, parking, etc.? How should I look at the portfolio for mobility?

Yeah, it covers the entire story. So we evolved there. I think about two to three years ago, we had a similar interview when I testified about open, in fact, embedded finance initiatives.

So we really started the initiative and the team from an Open Banking perspective of embedded finance and, at that time, had some initial partnerships in the automotive sector. KBC decided to focus on ecosystems and combine Open Banking and Insurance with our partners to create the best solutions for our existing and new customers. This approach works in multiple directions, integrating embedded finance, and we are now collaborating with major automotive players in Belgium who sell our finance and insurance products in detail.

But also the other way around. We have a lot of mobility services in our mobile app, including public transport. You can buy train and bus tickets, and since almost a year now, we have also added cars to the app. So we have integrated those automotive players into the KBC environment as well.

It’s about linking in different directions. To me, Open Banking today is really that entire view. Banks open up towards other parties, and other partners integrate into the banking context in order to be able to provide the right services on our site as well, towards our customers.

To come back to your question, I think PSD2 was definitely a game-changer. It ensured we could build our infrastructure and gave us a head start in the market, allowing us to look at things in another way. But over time, you realise you have to take into account business ambitions, customer expectations, customer behaviour, and find the best solutions that match all those aspects.

So yes, it was a game-changer, but maybe not what it was intended for at the start.

The use cases you've been sharing. I'm a frequent user of quite a few of them. Buying a car hasn't gone that far yet. But how successful have these been, and how important was the regulatory framework in building them? I've already done some research, and if I look at the Belgian banks today, in terms of premium API offering?

There's not one that even comes close to where KBC is today. That makes me wonder to what extent it was a regulatory trigger that made you go that far, or a strategic commercial trigger?

Regulation opened the way for us, especially in embedded finance within the automotive industry, where car dealers have been offering financing solutions for the past 30 or 40 years. Several other providers also deliver these services to the dealers.

I think that, because of PSD2, we were obliged to foresee an API infrastructure. We were obliged to plan for other partners to be able to connect to the KBC infrastructure. So that hurdle was already taken when the opportunity arose to take the next step and make business out of this connection, out of this infrastructure that was already built at that time.

Without PSD2, I believe we wouldn't have those successful partnerships now, as the initial investments would have been too high to begin with. There's definitely a connection there.

What does all this say about the definition of Open Banking? At conferences, we often hear Open Banking described as something similar to PSD2. I wonder whether this should be limited to the regulatory aspect, or whether we should look at the API-based banking infrastructure at large?

Definitions can be personal, and we can talk about them for hours. It can be an interesting discussion as well. In my opinion, Open Banking is even more than that. It's bigger because it's not only about the bank being open towards other parties; it's also about expanding the banking offer with non-financial services.

So it involves other partners willing to connect with the banking or financial environment. So if I talk about Open Banking, it's even more than just the bank opening up for other parties, or the insurance business, for that matter.

Okay. Who benefits most from Open Banking initiatives? Would it be consumers, who gain access to many more products, or the businesses that can sell more or offer more services, or the banks themselves?

I believe that both parties need to see benefits for Open Banking to succeed. If a business doesn't gain from it, they have no reason to invest. Conversely, if it's too complicated or customers lack trust, they won't use it.

Without mutual benefit, neither side gains, the customer experience isn't improved, and adoption remains low. For a successful Open Banking model, both sides should benefit. Additionally, as we observe, this balance is crucial.

Since the launch of PSD2, we have had several initiatives within KBC to use PSD2 data to make processes more straightforward for our customers. They would certainly benefit from that. But as long as the process and authentication are not as flawless as customers expect, too few customers use it, and there is no business case for further implementing such initiatives.

Next question. Looking back, what did we get right and what did we get wrong with Open Banking implementation? I think we can look at it from a banking industry perspective. So, your personal opinion on what the industry did right and what they did wrong when it comes to Open Banking adoption?

Very big question. Looking at the present and the rise of AI and AI Agents, it was definitely right to push for openness and to ensure services and products are available via a new channel, the API channel at that time, still today, but that needs to evolve further in order to be open to the new tools, the LLMs of tomorrow. Because I believe they will interact with those interfaces as well. It's not clear yet how, or what exactly, banks should offer.

For sure, they will interact and find ways to be the first point of contact with the end customer.

Overall adoption of Open Banking is rather limited today. What could have been done better to drive more adoption? We often see the UK as quite a success. In May, we had the Central Bank of Brazil at our conference in Brussels. They had a completely different lens on success, on what success could be for Open Banking in Europe. What has failed when you look at PSD2 or Open Banking at large?

I am not fully aware of the situation across Europe, so I will focus on Belgium, where I still have some affinity. I believe the issue was that it was perceived as a one-way process—mainly involving banks. To me, Open Banking involves more than just banks opening their systems, as there's no obvious business case for either the banks or other participants. You can require them to do certain actions, but when I think about my children, I can’t simply command them; I might convince them with some nice candy. It’s more effective when they see a clear benefit. Likewise, this initiative is viewed as a one-directional effort.

And in my opinion, that's not how you should make such an initiative succeed.

So we need a compensation scheme. Now it's interesting. I had another look at the Open Banking interviews I did back in 2019-2020, I think. Most banks were talking about how revolutionary Open Banking was going to be. Now, six or seven years later, most of these banks haven't done anything with it beyond what was legally required.

So there was definitely an expectation that it would completely open up the industry, but at the end of the day, uptake was rather limited, as people and organisations limited themselves to the regulatory-acquired APIs, with KBC a clear exception.

Do you think that PSR will solve what went wrong with PSD2?

I did a quick check on that matter. It's definitely an enhancement. There are some downsides, such as scalability issues and the many different structures or standards that arise, which do not help new businesses or initiatives succeed. Some gaps have been filled in now, but it still seems like a one-directional thing. A business case is essential, requiring market demand and customer pressure. As a bank, if you develop a solution knowing it will be valued by customers and help retain or attract them, it forms a solid business case. However, doing it just because it's required or imminent isn't very inspiring, nor appealing for the market.

A compensation scheme is a key topic of FiDA, which has been widely debated in Europe for several years. I've noticed significant industry reluctance toward FiDA, including difficulty finding speakers to discuss it at my conferences. In your personal opinion, is it a necessary addition to make Open Banking successful? If yes, should it be maintained in its current form?

While I'm not an expert, considering the recent developments in data and the significance of data and AI, I believe it's crucial to protect customers and individuals sharing their data. They should be able to share data confidently, knowing how it is used and who has access.

This protection should be standardised because most people don't read lengthy terms and conditions in apps. Establishing common knowledge or understanding is essential. If I see terms and conditions that are clear, I can trust they are followed. Therefore, I think having such regulations is beneficial.

I had an interesting or fun anecdote about this. Yesterday, I downloaded the KV Mechelen app, which is my favourite football club. This year, they require stadium entry through the app. They asked for my consent to share data with their partners, listing over a thousand partners with whom they would share the data if I agreed. It's quite frustrating to have to go through that entire list.

You checked them all?

I declined.

Yeah, but you're still able to use the KV Mechelen app. There are also examples of organisations that are refusing to use the app, which would make interaction very difficult, especially if you're a KV Mechelen fan, in this case.

Indeed, and yes, I could keep using the app, luckily so.

Next question: is the emergence of AI making Open Finance more important or exposing how far behind the industry really is today?

That's a difficult question. I think it's a new ball game. It's a new phase, where customers increasingly use their bank data and seek financial information differently. We need to evolve so LLMs and AI Agents that consume it can correctly inform customers. It's our responsibility to connect this technology to real business cases and remain relevant. As a commercial company, that's a key lesson. I don't think this indicates we're falling behind in any area.

At KBC, Kate is a very tangible example of this evolution. We are looking at how Kate can become part of these journeys and help customers interact with financial information and services in a more natural way. The challenge is not simply to add AI, but to connect it to reliable data, trusted processes and relevant business cases so that it creates real value for the customer.

So you see it more as an opportunity? Alright. Final question: who is really driving Open Finance today? Is it the regulator? Is it the banks? Is it fintechs, technology companies, AI providers, or perhaps customers themselves? And given you're working for KBC, how do you look at it from a KBC perspective, and how do you look at it from an industry perspective?

From a KBC perspective, we believe that customers are driving the Open Finance agenda. I'll use my definition of Open Banking because we want to provide relevant solutions for our customers, and these are not limited to banking and insurance solutions.

Given the successes we see, we notice that customers very much appreciate these broader propositions and the support they provide along the way.

And so, being an advocate of the devil, does it go beyond the bank's benefits, or does every business case need to have a business case for the bank as well?

From KBC's perspective, this represents a triple win. KBC, the customer, and our partner should all benefit from these collaborations. Personally, I strongly believe in this approach. It's impossible to succeed when one party is at a disadvantage, because then it won't be successful.

So it's key to find where you can help each other and how you can complement each other, so each party can reach its objectives. From a personal view, I really support that.

Alright. Do you have any broader industry insights or opinions on this?

I believe that customers include both private individuals and important business clients. Customer behavior, especially on the business side, will influence the pressure on and expectations from their financial partners. Companies will likely raise the standards for data and services offered within a banking or Open Banking environment, aiming to access these resources conveniently from their preferred location.

I believe those are all my questions. One last thing: when you mention Open Banking, I get the impression that it mainly involves KBC adding more services to its platform, rather than the other way around. Is that correct, or am I mistaken?

That's a correct interpretation,

Alright. Thank you very much for your time and broader perspectives on Open Banking and Open Finance.

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