Open Finance in the US and Europe: A Perfect Storm in Retail Banking

June 6, 2002


New York, NY, USA June 6, 2002

Celent releases an in-depth analysis of Open Finance, a key issue for bank CEOs. By 2005, Celent predicts that 60% of top US and European banks will sell competitors' products. Celent sees Open Finance as ineluctable in a world of undifferentiated banks struggling to market commoditized products.

In a new report, " ", Celent examines the long term drivers forcing a shift from a proprietary distribution model in retail banking towards an Open Finance model. Celent predicts that 60% of top US and European banks will offer competitors' products by 2006, up from 15% in 2002; 100% of them will offer complimentary products, up from 60% in 2002.

Celent anticipates Open Finance to take the retail banking industry by storm in the next 4-5 years. "Bankers hoping to see Open Finance vanish misjudge the drivers and the scope of the phenomenon " comments Gwenn Bézard, the author of the report. The surge of Open Finance, which involves the delivery of third party products, as well as the sale of products via non-proprietary channels, stems from fundamental changes in the banking industry, including the disruption of traditional banks’ value chains.

"With Open Finance, banks are experiencing the same forces which reshaped consumer retailing in the 60's" adds Gwenn Bézard. For decades, the banking industry has escaped the fate of the food, music, and consumer electronics industries, which are now dominated by global distributors. Because of the complexity of their products, low automation, and regulatory issues, banks have maintained a stronger integration of manufacturing and distribution. Over the past decade, however, multiple forces have encouraged banks to unbundle manufacturing and distribution, opening their delivery networks to non-proprietary products, as well as relying on third-party manufacturers for best-of-breed products. While banks are still keeping discount retailers at bay, they have begun to use their distribution networks to offer products from other financial institutions, thus creating Open Finance. "Banks are being pulled into Open Finance faster than they may realize" concludes Gwenn Bézard.

A Table of Contents is available online.

of Celent Communications' Retail Banking research service can download the report electronically by clicking on the icon to the left.


Send mail to with questions or comments about this Web site.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
Tel: +1 212 345 1366

Europe (London)
Chris Williams
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
Tel.: +81 3 3500 3023

Table of Contents


  New York, NY, USA June 6, 2002

Open Finance in the US and Europe

Return to report Abstract


  De-regulation, Mutual Funds, Internet 9
  New Value Chain 11
  Distribution Over Capacity 17
  Affluents Trap 22
  Product Commoditization 25
  Customer Acquisition Costs 27
  Strategic Alliances Over Mergers 31
  Race to Market Power 34
  Global Production vs. Local Distribution 38
  Bradford & Bingley 40
  American Express Financial Advisors 45
  Cetelem (BNP Paribas) 48

Sign in to download reports and access personalized information