The open office concept reshaped much of working life — and was largely driven by a desire to improve collaboration, efficiency and effectiveness. A similar drive for collaboration is reshaping some bedrock industries of the American economy, albeit in the context of quickly evolving digital platforms.
Different industry sectors have treated concepts of openness with a range of responses, and the factors pushing them toward the “open industry” concept also differ. But there are definite similarities, as increased openness is seen as a key to digital success and customer satisfaction, one that quickly accelerating digital platforms make not only smart but necessary.
The pandemic’s effect on consumer habits has driven people to expect more accessible, seamless digital experiences. This has encouraged companies, organizations, and even government agencies to share data and transmit information collaboratively, with the end user at the center. Companies can no longer rely on claims of competitive advantage to hold back information. How is this showing up in those bedrock industries? Here’s what’s happening in banking, healthcare and software.
Understanding Open Banking
For banks, the trends noted above have led to the concept of open banking. It’s when a technology-enabled approach uses aggregated and authenticated data, connected via APIs, to give consumers more ways to consume their financial data while also making transactions more secure. The draw for consumers — especially younger, digitally native ones — is the ability to better manage their finances, identify the best products and services and easily transfer their funds from one financial institution to another.
Europe has already seen open banking’s arrival thanks to the quick adoption of regulations for safely sharing consumer financial data combined with consumers increasingly relying on digital tools during the COVID-19 pandemic. Demand is also building in the U.S., and the Consumer Financial Protection Bureau last fall made what was likely the first step toward a formal regulatory structure.
Banking leaders in the U.S. — particularly mid-market players who often take a slow approach to technology — shouldn’t wait to jump on board. Waiting would mean not only failing to provide customers what they (increasingly) want. It would also mean passing up the chance to increase the value of one of their most critical assets: their own, internal data. Understanding the value of that data within banking and other sectors has improved over the big data revolution of the past decade. But many organizations are still passing up ways to find new customers, cross-sell existing products, improve their services and build new partnerships.
These trend lines were converging before COVID-19, but they’re clearer now. Twenty percent of adults surveyed in the UK last summer said they were using fintech platforms like Mint, Plaid, QuickBooks and Quicken, a number that rose to 50% of young adults during the pandemic. Meanwhile, Visa and MasterCard are moving rapidly to add fintechs to their platforms to support open banking and create a network-agnostic payment technology system.
Regulatory Changes Spur Healthcare Evolution
Meanwhile, the key term in healthcare is “interoperability,” and it’s leading to a landscape in which patients can take greater control over their healthcare information. They will be able to choose care options that work for them, enabled by an app economy that drives innovation across the ecosystem.
The drivers here are legislative and regulatory, as the 21st Century Cures Act and the CMS Interoperability and Patient Access Final Rule together are set to transform how health information is shared among patients, providers and payers. Critically, these new standards will accelerate partnerships across health payer and health system boundaries as organizations look to establish integrated processes designed to deliver personalized care plans and reduce administrative burdens and costs.
For healthcare leaders, viewing it as a compliance matter to get past is short-sighted. By fully leveraging the interoperability moment, the vast healthcare ecosystem can work together to provide better care and improve outcomes. With its cleaner, standardized data sets, interoperability promises to reduce or even eliminate chronic problems across healthcare, making everyone healthier and happier.
And, like banking, healthcare should consider the opportunity with a pandemic lens. As noted in Harvard Business Review, “even though up to 96% of hospitals and 86% of physician offices have adopted [electronic health records], we still don’t have EHRs that can rise to the information challenges that clinicians face every day, let alone those posed by COVID-19.”
Related Article: Will COVID-19 Be a Tipping Point for Technology?
Software’s Open-Source Foundation
Unlike banking and healthcare, the American software industry has long been built on the sharing of data, particularly programming code. But even in this sector, there have been attempts to hold onto assets they deem as competitive advantage. For 10 years, Google battled Oracle Corp. in court over the use of 11,500 lines of code from Java SE to build the Android platform. Oracle called it copyright infringement. Google said it was fair use.
In April 2021, the U.S. Supreme Court ruled in Google’s favor, reaffirming the open-source business model that has fueled some of the digital innovation we see today. As Kent Walker, Google’s chief legal officer and senior vice president for global affairs, told The Wall Street Journal after the ruling, “Innovation happens by standing on each other’s shoulders.”
The decision, in the long term, should give companies more freedom to reuse open-source code without fear of legal repercussions, even if they have to tread lightly. They should, however, create an open-source review policy to document all usage of open-source code in compliance with industry standards.
Related Article: Why Open Source Usage Is Increasing in the Digital Workplace
Develop Your Strategy, Now
At this point, open data should be at the forefront of digital strategy for banks, healthcare companies and software firms. Data can be used in more ways than ever to produce value, from banks monetizing their relationships with third parties, to healthcare payers extending their engagement with patients to software companies taking a comprehensive view of what they can and can’t do as part of a companywide strategy.
Through novel and proprietary APIs and open-source code, data can bolster bottom lines while also improving the lives of your customers. If you want to keep pace with the market and outflank your competitors, it’s vital to develop an effective open data strategy.
Nick Hahn is a Director in West Monroe Partners’ Digital practice, working with clients nationwide to realize digital business transformation. He has more than 30 years of experience as a senior-level strategist, line manager and business leader for global organizations.