It was recently announced that Britain's biggest lenders will unveil proposals to oversee the "open banking" system.
First introduced in 2018, open banking allows, with your permission, your financial data such as your spending habits, regular payments and companies you use - basically your bank statements - can be shared with other financial institutions. It has been revolutionary and is becoming a real game changer in that sector.
Why? Well it’s all about delivering improved service and personalized product delivery for consumers. Banks can analyse how you spend to tailor products to your needs, such as a new credit card or savings account. Using an app, you could save money on bills, avoid charges by moving money between accounts and much more.
A recent report by McKinsey suggested that this "open data" approach could deliver an economic benefit ranging from 1-1.5% of GDP in 2030 in the European Union and the U.K. By "open data" we mean the ability to share data through a digital ecosystem in a manner that requires limited effort or manipulation.
Now imagine taking that open data approach and applying it to the travel industry, effectively creating the "open traveler."
Apps are already available that organize your travel documents, hotel reservations tickets and flight itineraries, making it easy for travelers to store and manage their travel information as well as view travel confirmations.
The emerging opportunity is to take this further, adding layers of data which enables travelers to store personal information, contact details, passports, visas, previous trips and holidays and then manage travel related likes and dislikes, such as accommodation, preferred airports, airlines, etc.
Add to this another layer that facilitates the initial planning of future holidays and trips in the short term and bucket list items in the longer term.
Introduce a further layer which allows the customer to manage and update every other conceivable preference covering areas such as holiday types, food, activities and much more, and you are then moving to a place where you can deliver very personalized, targeted and tangible benefits to the traveler.
Specific preferences such as preferred individual hotels or groups, cruise ships. lounge, air carriers, shared across travel businesses, will lead to a level of market choice that the finance and retail sectors are already delivering to customers.
It would also spur action in other markets, by encouraging travelers to look at other third party providers offering products such as financial services and payment options.
Keeping it safe and providing choice
Security and ensuring that the customer is in control of their data is key, and whilst any such approach will always be permission driven, the benefits to customers will be significant.
Secure connectivity and integration methods, which allow third party providers to access the information, are already widely used allowing people's information to be shared, such as their location, preferences, or whether or not they're in credit. By creating a blueprint for travel businesses and third parties to follow when using APIs, security measures will ensure that data is kept safe.
The Open traveler approach could be a very big deal for the travel industry. Consumers would have more options for managing their travel and accessing very relevant products and experiences. Data aggregation and enrichment is now part of many travel apps and platforms.
Providing compelling digital experiences for customers, information and choice will drive the adoption of open traveler application programming interfaces (APIs), in areas like reservations, travel insurance and payment options. Similarly, App developers will have an easier job with open APIs and the introduction of artificial intelligence could deliver an unrivalled product matching process.
While the open traveler approach may seem counter intuitive and perceived to be a loss of some degree of control by the businesses that adopt it, opening their products to wider markets and the offering of new client propositions, combining predictive analytics and artificial intelligence will undoubtedly drive growth for those businesses that are genuinely committed to delivering exception customer service and experience.
The potential of this approach for travel companies is huge, creating exciting business opportunities, new revenue streams and access to profitable markets that were once unreachable.
The big question is, whether the travel sector is able to move in that direction and begin to create a very different customer experience in the very near future.