Bankers Expect A Profit Bump From Open Banking
#Bankers #expect to see an increase in revenues #from #Open #Banking but it may be a competition to see who gets the customer. Will fintechs jump into the opportunity?
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European Open Banking Grows Through Smart Regulation
Data privacy regs in Europe provide standards for #banks and #FinTech to share data, with a customer’s consent, so they can offer tailored solutions.
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Digital Banking Results In Longer Sessions At Call Centers — Law Of Unintended Consequences
To paraphrase William Gibson, Open #Banking, and #digital banking, are here…they just aren’t evenly distributed.
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Gates Foundation Supports Expansion Of An Open Mobile Banking Platform in Africa
With some tech support from the Bill & Melinda #Gates #Foundation an #open #mobile #banking app is launching in #Africa.
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The brave new world of Open Banking in APAC: Malaysia
Following the rollout of #Open #Banking regulations in the UK and the launch this year of the EU’s Payment Services Directive 2 (PSD2), countries across the Asia-Pacific region are following suit to establish their own frameworks to enable #banks to share select customer data with third-party providers (TPPs), and TPPs to run transactions on customer accounts.
Click/tap to view larger Regulatory Developments
As in Singapore, #Malaysia’s approach to Open Banking, while less comprehensive than that of its city-state neighbour, has been to establish a non-mandatory framework and to support banking transformation with the creation of implementation teams. There are currently no timelines for implementation.
Malaysia’s central bank and principal financial services regulator, Bank Negara Malaysia (BNM), established a Financial Technology Enabler Group (FTEG) in June 2016 to support innovations in the sector. The FTEG is responsible for formulating and enhancing regulatory policies related to the adoption of new #technology in financial services in the country. Accordingly, in mid-2017 it launched a #Fintech Regulatory Sandbox framework to allow the testing of applicable technology, including Open Banking.
In its final quarterly bulletin of 2017 [PDF], BNM focused on open APIs and their potential impact on the country’s financial sector, promising to establish an Open API Implementation Group in early 2018. This was set up in March, with a remit to develop standards on open data, security, access rights and oversight arrangements for TPPs, and to review existing regulations covering controls on customer information.
Also in March, the BNM set up an Interoperable Credit Transfer Framework (ICTF), which promotes collaborative competition for mobile payments.
Key market initiatives, opportunities & risks
The government is prioritising the impact of new technology on the banking sector, with insurers and government agencies a secondary focus. Banks have already seen the opportunities and risks, with some acting to anticipate and benefit from the impact of the country’s vibrant fintech scene, although in the main they lack the capabilities to launch and scale open APIs.
CIMB, for instance, launched its fintech incubation programme as early as 2015, targeting and mentoring startups for their API platforms. The bank subsequently released a point-of-sale and payments platform. Standard Chartered in early 2017 launched a global developer sandbox with limited API capabilities. Later that year, Maybank also launched a developer portal equipped with 20 APIs, enabling 85 differing operations. Hong Leong Bank, meanwhile, runs a “LaunchPad” contest to develop innovations, which led to the successful launch of five applications in its first year.
Another significant development that banks in Malaysia seized on was BNM’s granting in December 2017 of an e-money license to WeChat Pay, the payments platform run by Chinese tech giant Tencent. Hong Leong Bank, Maybank, Public Bank and CIMB subsequently partnered with WeChat Pay.
Partnering with fintech innovators is one way banks in Malaysia are monetising Open Banking APIs; bank-specific POS systems have also been sold with payment-API connectivity. Predetermined pricing models—subscriptions, per-call and flat rate charges—have also been used. So far, successful open API use cases such as Maybank’s Treats Card app, on the Maybank2u platform, have been focused on retail customers.
Click/tap to view larger Several global, regional and Malaysian banks have granted developers access to their APIs via publicly available developer portals and sandboxes. Maybank, OCBC and DBS have advertised various applications and partnerships that have arisen from the use of their developer platforms. Some other banks, such as CIMB and Hong Leong, have been more selective, privately choosing which fintechs can access their APIs.
The use of developer portals and individual selection means that Malaysia has a number of siloed Open Banking use cases and products. The country’s Open Banking future will depend on how banks, fintechs and regulators develop a common framework and infrastructure that supports a cohesive ecosystem. The ASEAN Financial Innovation Network (AFIN), has been established to do exactly that.
AFIN, which is supported by the Monetary Authority of Singapore (MAS) and the International Finance Corporation, aims to accelerate fintech innovation, digital transformation and build an Open Banking ecosystem across the region. This gives Malaysian fintechs and banks the opportunity to develop the infrastructure and capabilities with other geographies to support a regional Open Banking ecosystem.
Like Singapore, there are risks in Malaysia’s approach: without enforced compliance, the standardisation and adoption of APIs across the country could prove difficult. There is also uncertainty around when the Malaysian authorities will impose regulation.
In Malaysia as well, further opportunities will present themselves to drive retail and SME customer adoption with additional services and reduce the cost of servicing banks’ customer bases. Ecosystem platforms for real-time data sharing between banks and regulators will enable new use cases and shared revenue models—and, ultimately, enable banks to build their own TPP services using their competitors’ APIs.
This article was written in collaboration with Ewa Wojcik, Sam Waldman and Hakan Eroglu. Many thanks for their input, research and analysis.
Accenture at Sibos
We’ll be discussing Open Banking and other topics at Sibos. Come see us at our booth and join us in the conversation around enabling the digital economy. Keep up to date on all the latest from us around Sibos right here on the blog.
The post The brave new world of Open Banking in APAC: Malaysia appeared first on Accenture Banking Blog.
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@fintechna
The brave new world of Open Banking in APAC: Malaysia
Following the rollout of #Open #Banking regulations in the UK and the launch this year of the EU’s Payment Services Directive 2 (PSD2), countries across the Asia-Pacific region are following suit to establish their own frameworks to enable #banks to share select customer data with third-party providers (TPPs), and TPPs to run transactions on customer accounts.
Click/tap to view larger Regulatory Developments
As in Singapore, #Malaysia’s approach to Open Banking, while less comprehensive than that of its city-state neighbour, has been to establish a non-mandatory framework and to support banking transformation with the creation of implementation teams. There are currently no timelines for implementation.
Malaysia’s central bank and principal financial services regulator, Bank Negara Malaysia (BNM), established a Financial Technology Enabler Group (FTEG) in June 2016 to support innovations in the sector. The FTEG is responsible for formulating and enhancing regulatory policies related to the adoption of new #technology in financial services in the country. Accordingly, in mid-2017 it launched a #Fintech Regulatory Sandbox framework to allow the testing of applicable technology, including Open Banking.
In its final quarterly bulletin of 2017 [PDF], BNM focused on open APIs and their potential impact on the country’s financial sector, promising to establish an Open API Implementation Group in early 2018. This was set up in March, with a remit to develop standards on open data, security, access rights and oversight arrangements for TPPs, and to review existing regulations covering controls on customer information.
Also in March, the BNM set up an Interoperable Credit Transfer Framework (ICTF), which promotes collaborative competition for mobile payments.
Key market initiatives, opportunities & risks
The government is prioritising the impact of new technology on the banking sector, with insurers and government agencies a secondary focus. Banks have already seen the opportunities and risks, with some acting to anticipate and benefit from the impact of the country’s vibrant fintech scene, although in the main they lack the capabilities to launch and scale open APIs.
CIMB, for instance, launched its fintech incubation programme as early as 2015, targeting and mentoring startups for their API platforms. The bank subsequently released a point-of-sale and payments platform. Standard Chartered in early 2017 launched a global developer sandbox with limited API capabilities. Later that year, Maybank also launched a developer portal equipped with 20 APIs, enabling 85 differing operations. Hong Leong Bank, meanwhile, runs a “LaunchPad” contest to develop innovations, which led to the successful launch of five applications in its first year.
Another significant development that banks in Malaysia seized on was BNM’s granting in December 2017 of an e-money license to WeChat Pay, the payments platform run by Chinese tech giant Tencent. Hong Leong Bank, Maybank, Public Bank and CIMB subsequently partnered with WeChat Pay.
Partnering with fintech innovators is one way banks in Malaysia are monetising Open Banking APIs; bank-specific POS systems have also been sold with payment-API connectivity. Predetermined pricing models—subscriptions, per-call and flat rate charges—have also been used. So far, successful open API use cases such as Maybank’s Treats Card app, on the Maybank2u platform, have been focused on retail customers.
Click/tap to view larger Several global, regional and Malaysian banks have granted developers access to their APIs via publicly available developer portals and sandboxes. Maybank, OCBC and DBS have advertised various applications and partnerships that have arisen from the use of their developer platforms. Some other banks, such as CIMB and Hong Leong, have been more selective, privately choosing which fintechs can access their APIs.
The use of developer portals and individual selection means that Malaysia has a number of siloed Open Banking use cases and products. The country’s Open Banking future will depend on how banks, fintechs and regulators develop a common framework and infrastructure that supports a cohesive ecosystem. The ASEAN Financial Innovation Network (AFIN), has been established to do exactly that.
AFIN, which is supported by the Monetary Authority of Singapore (MAS) and the International Finance Corporation, aims to accelerate fintech innovation, digital transformation and build an Open Banking ecosystem across the region. This gives Malaysian fintechs and banks the opportunity to develop the infrastructure and capabilities with other geographies to support a regional Open Banking ecosystem.
Like Singapore, there are risks in Malaysia’s approach: without enforced compliance, the standardisation and adoption of APIs across the country could prove difficult. There is also uncertainty around when the Malaysian authorities will impose regulation.
In Malaysia as well, further opportunities will present themselves to drive retail and SME customer adoption with additional services and reduce the cost of servicing banks’ customer bases. Ecosystem platforms for real-time data sharing between banks and regulators will enable new use cases and shared revenue models—and, ultimately, enable banks to build their own TPP services using their competitors’ APIs.
This article was written in collaboration with Ewa Wojcik, Sam Waldman and Hakan Eroglu. Many thanks for their input, research and analysis.
Accenture at Sibos
We’ll be discussing Open Banking and other topics at Sibos. Come see us at our booth and join us in the conversation around enabling the digital economy. Keep up to date on all the latest from us around Sibos right here on the blog.
The post The brave new world of Open Banking in APAC: Malaysia appeared first on Accenture Banking Blog.
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@fintechna
The brave new world of Open Banking in APAC: Singapore
Following the rollout of #Open #Banking regulations in the UK and the launch this year of the EU’s Payment Services Directive 2 (PSD2), countries across the Asia-Pacific region are following suit to establish their own frameworks to enable #banks to share select customer data with third-party providers (TPPs), and TPPs to run transactions on customer accounts.
Click/tap image to view larger Regulatory developments
#Singapore’s approach has matured rapidly to make the city one of the leading jurisdictions for Open Banking in the region. The groundwork was done as early as 2014, under the government’s Smart Nation Singapore initiative to drive the adoption of new digital technologies, starting with open data and payments.
In November 2016 the Monetary Authority of Singapore (MAS), in collaboration with the Association of Banks in Singapore (ABS), published a comprehensive roadmap—Finance-as-a-Service: API Playbook—which, in effect, set the gold standard for regulatory advice on the topic in Asia. The playbook set out a comprehensive framework that introduced governance, implementation, use cases and design principles for application programming interfaces (APIs), together with a list of over 400 recommended APIs and over 5,600 processes for their development.
Click/tap image to view larger In May 2017 MAS, the International Finance Corporation and the ASEAN Bankers Association launched the ASEAN #Fintech Innovation Network. AFIN aims to accelerate financial sector development, boost access to finance, improve the customisability of products and reduce banking costs in the region. AFIN is scheduled to launch their Industry Sandbox, which will sit between banks and fintechs, in late 2018. This interoperable and scalable infrastructure will act as a method to standardise banking infrastructure and data while also allowing institutions to test applications.
The launch in September 2017 of the Network for Electronic Transfers (NETS) nationwide payments service, including the NETSPay eWallet, was another major milestone. Also in late 2017, the government built an API Exchange (APEX) to serve as a centralised data-sharing platform, which allows government agencies across the city to share data securely through APIs. It has also established a Financial Industry API Register, updated semi-annually, which tracks APIs by functional category as they are launched.
The approach of Singapore’s authorities to Open Banking has been characterised by a willingness to shape innovation with a comprehensive, non-mandatory regulation and governance framework; to lead by example by opening their own data for APIs, and to establish scalable data practices and a payments infrastructure that underpin innovation in the area. MAS officials have preferred not to force the issue and to approach the development of Open Banking services in an organic fashion, according to comments made in recent media interviews. There is no specific timeline mandated for compliance or adoption.
Key initiatives, opportunities & risks
The reason for the regulatory light touch is principally because banks in Singapore see the opportunities of the #technology and are already keenly pursuing them, with competition driving innovation.
DBS, for instance, launched an Innovation Plan in mid-2015 that had over 1,000 experiments in APIs, cloud computing, microservice architecture and Machine Learning. In May 2016, OCBC Bank launched the first open API developer platform in Asia, Connect2OCBC. CitiBank’s Global Developer Hub opened its first platform in Singapore in late 2016; Standard Chartered did so in early 2017, and DBS in November that year launched an API platform with more than 20 categories and 155 functions. More recently UOB announced plans to launch an open, digital-only bank.
So far these efforts have been characterised by a focus on retail opportunities, with competition driving banks to move quickly and establish large API platforms while also releasing novel products that showcase Open Banking capabilities.
Many banks in Singapore, unlike elsewhere in the region, have partnered with fintechs and developers to launch applications that use their publicly available APIs. One example is Standard Chartered’s The Good Life service, which provides its Singapore customers with an ecosystem of merchants that offer deals, alternative payment methods and reward-point options. UOB, by contrast, has been more selective: instead of launching a public developer platform, it has selected specific fintechs and launched applications that leverage their APIs.
Banks in Singapore have monetised their APIs through a combination of private partnerships with third-party platforms, predetermined pricing models (including subscriptions, per-call and flat-rate charges) and also pricing models determined by sales functions.
There are risks in Singapore’s approach: Without enforced compliance, API standardisation across the country is difficult. There is also uncertainty around when the MAS will impose regulation.
Nevertheless, further opportunities will present themselves to drive retail and SME customer adoption with additional services and reduce the cost of servicing banks’ customer bases. Ecosystem platforms for real-time data sharing between banks and regulators will enable new use cases and shared revenue models—and, ultimately, enable banks to build their own TPP services using their competitors’ APIs.
Accenture at Sibos
We’ll be discussing Open Banking and other topics at Sibos. Come see us at our booth and join us in the conversation around enabling the digital economy. Keep up to date on all the latest from us around Sibos right here on the blog.
The post The brave new world of Open Banking in APAC: Singapore appeared first on Accenture Banking Blog.
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New private banking frontiers: mobile apps, convenience & personalization
In the first blog in this series, we discussed how #banks seeking to expand their presence in #private #banking and wealth management should employ digital solutions to provide customers with the #convenience and #personalization they have come to expect from other companies with which they do business.
#Mobile #apps are an essential part of such an integrated private banking strategy. Rather than an “add-on” feature, they should be a central element in providing exclusive services to people with premium needs. These services can range from personalized financial advice (delivered at the frequency the customer desires) to digital feeds of financial media tailored to customer needs.
A first-class mobile app should be:
Secure & private
The app should have two-step authentication and may incorporate a biometric login such as voice, facial or thumbprint recognition, as well as data encryption and fraud protection.
Innovative
The app may connect the customer with the private bank via a chatbot or may enable voice-controlled, hands-free interaction. It may aggregate all the customer’s accounts with that institution or with other institutions.
Robust
It should provide the customer with a portfolio overview and interactive tools for portfolio analysis and personalization, using both human and #robo-advisory capabilities. The app should support trading, brokerage and foreign exchange transactions as well.
Interactive
Through the app, the customer should be able to interact with client services via live chat, through call-backs or through other apps such as WeChat or Whatsapp. The app should also enable direct contact with the financial advisor via direct messaging, direct dial or video conferencing.
Personalized
The app should notify the customer of product and service offerings, provide tailored market and economic research and offer educational content using interactive tools and gamification.
Of course, the question now is not whether private banks should have a mobile app—but how to develop an attractive, value-added offering. Human interaction is still essential to private banking, but wealth managers using mobile apps in concert with other digital technologies will have more time and better insights with which to cultivate their customers.
The post New private banking frontiers: mobile apps, convenience &038; personalization appeared first on Accenture Banking Blog.
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The art of Open Banking regulation
Taking Europe as a blueprint, other jurisdictions are now using #Open #Banking as an accelerator to meet their own specific goals, which include increasing competition, reducing costs, fostering innovation and addressing consumer rights.
Some of the most prominent regulations globally include:
- PSD2 in the European Union
- CMA Open Banking in the UK
- HKMA Open API in Hong Kong
- Australia Treasury Open Banking
- Other countries in Asia Pacific (e.g. Japan, Malaysia), North America (e.g. US, Canada) and Latin America (e.g. Brazil, Mexico) are currently investigating Open Banking regulations.
In some cases, the regulations are moderate and favor the banking industry, while others more aggressively favor competition, which could potentially threaten #banks’ existing business models and revenues.
To some degree this depends on which of the multiple levers regulators use to achieve their specific goals, including:
- Target group: Are all banks regulated or a selected set of banks?
- Product scope: What banking products are targeted? The more products are affected, the more banks will have to find strategies to defend their existing business or take a leader position by innovating themselves.
- Use cases and access types: What type of use cases and access operations can be performed on the regulated products? Banks could lose their role as the trusted gatekeeper for customers, particularly where regulations require banks to open their networks to allow third parties to initiate transactions.
- Cost of usage: What are the costs for third-party providers to use the APIs? Most regulations require banks to open up access for free: in such cases, banks need to find ways to monetize Open Banking.
- Level of openness: Who has access to the APIs? In some cases, regulations allow TPPs to register with the authorities once and gain access to banks’ APIs without any contractual agreements or bank-specific registration processes.
- Level of market involvement: Who is involved in designing the #regulation? Are banks’ concerns and ambitions taken into account?
- API standards and infrastructure: Who is designing API and security standards and building the central infrastructure for the market? This is vital: multiple standardization initiatives could lead to fragmentation of standards and directory services.
How should banks act now?
As Open Banking rolls out worldwide, regulators are watching developments closely to learn best practices and implement a regime that will best meet their goals. However, too much regulation could threaten banks’ revenues and jeopardize their financial stability—which is not in regulators’ interests.
The art of Open Banking regulation is in finding the right balance between regulation and market dynamics. Banks in both regulated and unregulated markets should join forces now to take the lead in self-regulating rather being forced to act.
Read my complete article at Finextra for more insights and share your views.
Accenture at Sibos
We’ll be discussing Open Banking and other topics at Sibos. Come see us at our booth and join us in the conversation around enabling the digital economy. Keep up to date on all the latest from us around Sibos right here on the blog.
The post The art of Open Banking regulation appeared first on Accenture Banking Blog.
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@fintechna
How will data shape the future of banking?
Guest blogger Tara Brady discusses how #data-driven value creation can help #banks #shape their #future.
The digital revolution and mobile #banking have transformed the way people interact with their bank. This trend is set to continue, with new figures revealing that mobile transactions are set to rise by around 121 percent between 2017 and 2022, and average branch visits are set to drop from seven to four per year by 2022.
Traditional providers have also been faced with the emergence of challenger banks (such as Monzo and Starling), which are striving to capture the attention of millennials with their agile, digital offerings. The territory of the high street stalwarts is being encroached on by the likes of PayPal and Apple Pay, which have disrupted the payments market, traditionally an area that banks have dominated.
Customers or fans?
New entrants have energised their customer base to something often more akin to a fan club, often incorporating gamification principles to encourage customers to use their digital platform, with the ultimate aim of improving their customer retention and online customer experience.
Driving this is the principle of personalisation, and the ability to customise, which promotes a sense of ownership in the game through self-expression. Having experiences that deliver delight, preferably packaged into social media-friendly personalised snapshots, is what drives many consumers.
As brand loyalty diversifies and consumers want more personalised experiences, these techniques become a great way to attract and retain customers. Personalisation allows businesses to understand why their customers do what they do, and that they share their values.
Data is king
However, what is underlying this ability to personalise and drive delight is data. Data has quickly become king. The value of the UK data market is set to hit £1.1 billion ($ 1.58 billion) in 2018, making it the second-largest data market in the world and the biggest in Europe. No longer just a by-product of transactions and interactions, customer data itself has become a valuable commodity that can be used to give insights into customers’ tastes and habits. Learning how to interpret and influence those tastes and habits is one of the keys to unlocking the power, and the value, of data. Being able to offer customised products based on the trends, demographics and insights derived from the data, as well as providing the platform to bring all these services together, is where providers like Atom and Monzo have raced ahead of the field, finding unique ways to gamify the data they collect.
Whilst data is king, not all data is created equal. The key is deciphering how best to use it to play to your strengths.
But it is not just these challenger banks that can harness the value of data—retail banking as a sector is uniquely placed to ride this wave of value creation. Purely in terms of reach, whilst 78 percent of UK adults use Facebook, a full 97 percent have some kind of banking product. So the opportunity is there.
The evolving banking ecosystem
As a result, the retail banking industry is beginning to broaden in unprecedented ways. This is partly due to multitudinous new and evolving technologies generating, among other things, completely different access to data. All this is spurring increasingly serious conversations around how the future of banking will be shaped. The key to long-term success will be a move away from the monolithic banking model, towards an evolving ecosystem that encourages competition but also supports success for all. And data represents a major monetisation opportunity in this changing environment.
It’s critical though that banks play to their strengths rather than forcing themselves into models within which they don’t truly fit. Established banks do not need to emulate the personalisation and game-logic of the challengers to make a success of this new marketplace. That said, without banks taking a different path and creating different offerings, the ecosystem won’t be able to function. Banks need to understand their natural fit within the future banking ecosystem to give themselves the greatest chance for success and ensure the strongest foundation upon which to build a data monetisation strategy. The potential benefits of a successful approach are ample, but starting from a shaky foundation could bring this tumbling down early on.
What kind of bank do you want to be?
Our new point of view, which discusses this topic and asks “What kind of bank are you?” and &8220;What bank do you want to be?&8221; provokes an inward look at your place within the future retail banking ecosystem. To read the report in full, please email peter.scoffham@accenture.com.
Tara Brady
Senior Managing Director
Financial Services, UK & Ireland
The post How will data shape the future of banking? appeared first on Accenture Banking Blog.
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