Beyond Open Banking – Disrupting the Supply Chain

Traditional supply chains are changing in many ways. With consumers and businesses having considerable access to information, the ‘middleman’ or ‘broker’ is often not needed in the modern economy. A lot of people are choosing to sell their houses via social media instead of paying fees to real estate agents. Companies are creating fantastic video campaigns around job opportunities, rather than spending money on recruiters and price comparison websites are an increasingly popular tool for both consumers and businesses looking for insurance with no need to go via a broker.

The retail supply chain is no different. Traditionally, manufacturers and wholesalers sold to retailers rather than going straight to the consumer because they didn’t have the marketing, shipping and customer service capabilities to operate directly. Nowadays, with online retail being cheap to set up, digital marketing being relatively low cost and delivery services popping up everywhere, manufacturers are finding it much easier to reach consumers with no need for a retailer in the middle. Of course, there’s one other thing that makes it easier for manufacturers to sell direct, and that is open banking. With data sharing and open APIs it’s much easier and faster for all types of merchant to integrate payment gateways on their websites. 

Although cutting out the ‘middleman’ indicates a shrinking supply chain, in the retail sector it’s actually growing in other ways due to the advent of open banking. New intermediaries are entering the picture who can utilise the data provided by open APIs to introduce new services between the retailer and the consumer. From providing tailor-made offers at the point of check-out to approving payment plans during the customer journey, the possibilities for innovation in this area are extensive. The retail sector has barely touched on this, so expect a number of subsidiary services to pop up around this new data sharing initiative. As use cases for open banking increase and its capabilities are fully realised, there are a lot of opportunities for fintech companies to disrupt multiple sectors. With UK online retail being worth more than £200bn annually, it will be interesting to see it revolutionise over the coming months and years.