Tyranny [ tir–uh-nee ] is often defined as the arbitrary or unrestrained exercise of power. In addition, most people reading that definition will assume that power belongs intrinsically to an outside force. However, what if that outside force has that power only because we cede it that power through lack of analytical thought and careful management of expectations?

Open banking uses APIs to share your financial account data and give you access to innovative financial services. More and more, online banking offerings are being expanded, not by native development of new functionality, but by adding third-party tools, often at the specific request of credit unions. Consequently, online banking may be less like a custom-built house produced by a single builder and more like a modular home where the sections are produced by separate designers who have no idea what the adjacent sections function like or look like.

Before you recoil in horror, picturing an ancient castle that seems like it might have housed Frankenstein’s Monster, you should realize that a good online banking vendor can do a lot to mitigate some of the ugliness that I have described. However, that is primarily at the cosmetic level. Since most of the security-related requirements will be determined by the vendor, it will be harder for the online banking vendor to mitigate underlying flaws without simply refusing to do the project completely. As I will explain below, this is an area where your initiative and analytical thought can help you manage expectations and avoid aspects of the tyranny of open banking.

The first question you need to ask yourself before you thrust yourself and those who depend on you into the brave new world of open banking is this: Is this a worthwhile thing to do? As you can see from the question, it is akin to a cost-benefit analysis. There are a minimum of six questions to ask yourself and your leadership team as you seek to answer this question, and each have its own set of questions to help provide answers. The list is meant to be a catalyst to your analysis rather than be exhaustive.

• Is this functionality a fleeting fad or a foundational functionality?
  • How long has the concept been around?
  • How long has the vendor been around?
  • How many other vendors of similar functionality are out there?
  • What percentage of your members would benefit from it?
  • What percentage of your members will actually use it?
• Is this functionality likely to maintain, grow, or decrease my membership?
  • What kind of members will leave the credit union primarily because I don’t offer this?
  • What kind of members may join the credit union primarily because I do offer this?
  • How many members might join the credit union primarily because I offer this?
  • How many members might stay with the credit union primarily because I offer this?
  • How many members might leave the credit union primarily because I don’t offer this?
  • What kind of technology is required to use this functionality?
• Is this functionality likely to make a measurable change in current membership engagement?
  • Might members who treat the credit union as their primary financial institution decrease their engagement with the credit union to the point it becomes a secondary financial institution, even if they don’t close their membership, based on a failure to offer this functionality?
  • Might members who treat the credit union as their secondary financial institution increase their engagement with the credit union to the point it becomes their primary financial institution based on successfully offering this functionality?
  • What kind of technology is required to use this functionality?
• Is this functionality likely to make a change in the age demographic of my credit union membership?
  • Will offering this functionality help me attract and retain the next generation of credit union members?
  • Will not offering this functionality hinder me in trying to attract and retain the next generation of credit union members?
  • Will offering this functionality help me attract and retain other age demographics for the credit union?
  • Will offering this functionality hinder me in trying to attract and retain other age demographics for the credit union?
  • What kind of technology is required to use this functionality?
• Is this functionality likely to have other costs or benefits to the credit union?
  • Will this change how many physical branches we need?
  • Will this change how many ATMs or ITMs we need?
  • Will this change how many call centers we need?
  • Will this change how many or what kind of employees we need?
• What are the actual costs to offer this functionality?
  • Does my core processor already offer a similar functionality that might be available to me at a lower cost?
  • What will my online banking vendor charge to add this functionality?
  • What will my online banking vendor charge to maintain this functionality?
  • What will the application vendor charge for start-up costs?
  • What will the application vendor charge for monthly usage/maintenance costs?
  • Who will provide ongoing user support, and what will that cost?

No matter how you get in the position of needing to ask these questions—a vendor salesman, clamoring from members, idea forms from employees, or software you personally love and use—this is the type of analytical thought that will help you be confident you are headed in the right direction.

However, there are other questions that can contribute to understanding if a project is worthwhile as well as help you manage your expectations if you decide to go forward. Make no mistake, if you don’t ask these questions and get reliable answers, you will find the entire experience frustrating, if not disappointing.

The second group of questions can be summarized by a single, two-part question: What exactly am I buying and how much will it cost? This is what you want to clearly understand from the third-party vendor selling you the underlying software functionality.

Questions to ask your third-party vendor

• What options are available to make your functionality available?
  • Is there an SSO (single sign-on) option?
  • Are there APIs for my online banking vendor to develop native functionality?
  • Is there an SDK (software development kit) for my mobile app vendor to use?
  • Are there any outside parties you rely on to provide a component of your functionality?
• Will your functionality require integration/development to core provider information?
  • Is this a live access or a static file exchange?
  • What information will you need?
  • How long does this usually take?
  • What kind of testing do you anticipate?
  • What countries and time zone(s) are your developers in?
• What services will you provide our online banking vendor?
  • Do you have a development/staging environment for them to hit while developing and testing?
  • Do you have a written specification for them to follow?
  • How long will the test environment/data remain available?
• How reliable is your software?
  • How long has this software package been in production?
  • How often do you release updates?
  • What security measures are in place?
• Will you provide us a user acceptance testing environment (if appropriate)?
  • How long could this be available?
  • What hours of the day/week could this be available?
• How much is this going to cost?
  • What will you charge us for start-up/development costs?
  • What will you charge us for monthly usage/maintenance costs?

The number of entities involved in your particular development project can vary, but almost certainly you will need to ask yourself at least one more big question: What will it cost to deliver this software package to my members? This is what you need to know from your online banking and/or mobile app vendors, and here are some questions that will help you determine that.

Questions to ask your online banking/mobile app vendor(s)

• What options for implementation will you consider?
  • SSO to external vendor page?
  • SSO with vendor page wrapped in an iFrame?
  • Code a native user interface to vendor APIs?
  • Will you use the vendor’s SDK (if available)?
• How long will this project take?
  • What steps are involved in completing the project?
  • What is the projected timeline for each step in the process?
  • What countries and time zone(s) are your developers in?
  • What kind of testing do you anticipate?
• How does deployment work?
  • How long after development and testing are complete could deployment come?
  • Is there a way to turn this on for particular users (i.e. not available for all members) for staff testing in production?
  • Can there be a way to block certain users from accessing this functionality?
  • Will this software work for organizations as well as persons (if appropriate)?
  • Can you force users to update their apps when this new functionality is available?
  • Is there a way for us to advertise this new functionality within the various online applications?
  • Where/How will users access the new functionality?
• Will you provide us a user acceptance testing environment (if appropriate)?
  • How long could this be available?
  • What hours of the day/week could this be available?
• How much is this going to cost?
  • What will you charge us for start-up/development costs?
  • What will you charge us for monthly usage/maintenance costs?

Just in case your core data processor is separate from your online banking and/or mobile app vendors, there are a few questions for the core data provider in order to complete your overview and help you navigate this journey with minimal frustrations.

Questions to ask your core processing provider

• Will you be able to provide a user acceptance testing environment?
  • How long could this be available?
  • What hours of the day/week could this be available?
  • Can our data be part of this environment?
• How much is this going to cost?
  • What will you charge us for start-up/development costs?
  • What will you charge us for monthly usage/maintenance costs?

Make it work for you

Today, dealing with open banking projects is likely inevitable. Before you dive head first into such a project, arm yourself with the tools to do it successfully with the minimum amount of confusion, misunderstanding, and the inevitable disappointment that confusion and misunderstanding produce.

You do not need to give custom projects like this a tyrannical power over you. Careful analysis and management of your expectations will help you stay in control rather than feeling like a helpless victim.