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  • user 3:35 am on August 24, 2018 Permalink | Reply
    Tags: , , , , Cultivate, , Open   

    Cultivate your bank to compete in Open Banking ecosystems 

    When an insect searching for food triggers a Venus flytrap, the carnivorous plant reacts within half a second to capture it. It doesn’t have to get ready for that interaction—it’s always ready. need to have the same type of rapid reaction when it comes to partnership opportunities if they are going to thrive in the complex ecosystem of .

    In my last blog, I discussed how traditional banks will likely evolve into various open platform business models to ensure future growth. New entrants like banqUP, Revolut and Starling are already attracting consumers to the concept of marketplace banking—and there are indications that many incumbent banks are getting ready to follow suit. This approach wraps the best money-related apps, products and services from third parties around a robust and well-branded core financial services product (such as a current account or payments) to deliver a richer customer experience and create powerful network effects. Incumbent banks are starting to adopt this model to grow their businesses, making their APIs available to outsiders. These include Barclays, BBVA, RBS, Citi, Santander, Capital One, DBS , Goldman Sachs and others. While our recent research shows that only one percent of banking revenue in the US is being generated by open platforms, it has the potential to rapidly mutate into a Red Piranha flytrap that takes bites out of incumbents’ revenue.

    We&;ve conducted further research to assess where banks stand in their readiness to in the emerging open platform economy—examining three requirements for a healthy and collaborative ecosystem:

    1. Developer portal: the channel environment and experience for developers to interact with bank and customer data
    2. API offerings: the types of banking products and services being exposed as APIs for developers to consume and develop applications around
    3. Developer : the adoption of Open Banking across a broader developer community
    Read the report

    We found that global card services and global financial institutions offer the most advanced and differentiated capabilities across these three dimensions. Banks in southern Europe are differentiated by their platform usability and ecosystem engagement abilities; this explains the relatively higher maturity of developers in these regions. Western European banks seem more focused on exposing APIs that deliver value-added services. Leading digital banks, such as BBVA, which have already made APIs available beyond those mandated by regulations, are presenting various approaches for usage and pricing—a key indicator of developer-portal maturity. Although the developer ecosystems of global banks and card services are clearly ahead of other financial institutions, our research shows that southern European and Nordic banks are rapidly catching up.

    Despite the emergence of more aggressive approaches, the majority of incumbent European banks are only offering those APIs required to comply with PSD2 regulations, and very few are moving into value-add APIs. Fintechs and challenger banks, on the other hand, are working to offer a broad range of APIs and look more like non-financial services platforms, such as Amazon, which offer upwards of 100 APIs for third-party consumption. Also, card services like Visa and Mastercard now offer at least 25 API products that enable a range of services from accessing core business services to advanced data insights.

    Platform banking is still in its infancy, yet we expect to see an explosion of Open Banking APIs from financial institutions in the years ahead.

    Take these steps now to ensure your bank is ready:

    1. Seek out best practices from outside the financial services industry
    2. Develop a strategy to distribute open APIs
    3. Identify the value in going beyond compliance
    4. Introduce transparency in pricing for API consumption
    5. Accelerate network effects through platform innovation

    I invite you to read more about our research and banks’ relative open platform maturity in our report, Competing in the new era: Find value in Open Banking ecosystems 

    The post Cultivate your bank to compete in Open Banking ecosystems appeared first on Accenture Banking Blog.

    Accenture Banking Blog

  • user 3:35 am on August 15, 2018 Permalink | Reply
    Tags: , , , , Open, ,   

    Asia Pacific Joins the Open Banking Revolution 

    While Europe continues to advance its transformation triggered by the PSD2 and CMA Open Banking regulation, other countries are observing it carefully and planning their own agendas.

    In , the approach to Open Banking is being driven at a country level and is somewhat fragmented for now. There is no single body of legislation as there is with PSD2 across Europe.

    In some Asia Pacific countries, Open Banking is being driven as a regulatory initiative by governments and central . For example:

    • Australia conducted the Open Banking Review in July 2017 and has imposed a phased implementation of Open Banking by July 2019 for the big four banks.
    • In July 2018, the Hong Kong Monetary Authority (HKMA) published the Open API Framework for the Hong Kong banking sector. The HKMA expects local banks to deploy Phase I Open APIs within six months and Phase II Open APIs within 12 to 15 months.

    Meanwhile, in other countries, the implementation of Open Banking is being led through collaboration across the industry. For example:

    • The Monetary Authority of Singapore (MAS) is not compelling banks to share banking data. However, it sees the benefits to Open Banking and is supporting an organic approach to its adoption. In November 2016, MAS and the Association of Banks in Singapore (ABS) published a Financial Industry API Playbook to guide banks and fintechs in developing Open API-based services. Since then, several banks (e.g., DBS, OCBC) have made their APIs available through external developer portals.
    • In New Zealand, on behalf of the government, Payments NZ is coordinating an industry pilot of Open Banking with participation from the five major banks (ANZ, ASB, BNZ, Kiwibank and Westpac) as well as Datacom, Paymark, Trade Me and Mirco.

    With Open Banking, banks should be considering strategies to both attack and defend.

    Traditionally, banks have been very well vertically integrated, covering all aspects of the value chain—from origination to servicing to risk and balance sheet management. But in the last few years, non-bank fintechs and tech giants have started to disrupt this value chain. Asia Pacific has a huge population of untapped, unbanked millennials who are ready to embrace new technologies and services, making it a very attractive market for these disruptors.

    With Open Banking, banks should be considering strategies to both attack and defend. New digital offerings that are hard to copy and/or can be launched and scaled at speed can unlock new value pools. Yolt in the United Kingdom is a good example of this. In Australia, an Open API integration between NAB and Xero is helping NAB defend its SME business: It enables new service propositions such as cloud-based bookkeeping for their SME customers, including instant online approval for business loans.

    The next battleground for banks in an Open Banking world will be with industry ecosystems. There will be a range of opportunities for banks to partner with other corporates to create new value propositions. These will span a range of industries including telecommunications, energy, transport, retail and leisure, and will target customer journeys in completely new ways.

    The post Asia Pacific Joins the Open Banking Revolution appeared first on Accenture Banking Blog.

    Accenture Banking Blog

  • user 2:52 pm on July 17, 2018 Permalink | Reply
    Tags: , , , FINOS, Open, , ,   

    Open Source Expands In Finance With The FINOS Platform 

    is expanding choice for financial services by providing a trusted for fintechs and to work together.
    Financial Technology

  • user 3:35 pm on July 11, 2018 Permalink | Reply
    Tags: , , Open, , ,   

    Banks as open platform players 

    French essayist and critic Charles Du Bos summed up the ability of humans to change when he wrote, “The important thing is this: to be able at any moment to sacrifice what we are for what we could become.”

    For a long time, most have been one thing: vertically integrated product manufacturers and distributors, shops that sell only their own brand products. But with the move towards regulatory-driven Open Banking in competitive-friendly markets like the U.K., Hong Kong and Australia, new business models are emerging—including Player, one of four bank business models we identified as winners in the digital economy.

    Is the open platform bank an intermediate point on the journey towards lifestyle platforms, on which financial services are just one of many offerings?

    Unlike a traditional bank, a banking open platform is like a department store that carries all your favourite brands and also helps you coordinate outfits and do your interior decorating. Open platforms create a market where producers (supply side) and consumers (demand side) connect and interact in efficient exchanges of value. The result is a bank-branded app store where consumers shop to assemble the products and services they need to satisfy their everyday financial needs, building their own bank from components they know will work easily together. In this business model, the platform owner has the opportunity to maintain management of the customer experience and vet the third-party products and services being offered in that experience. In turn, aggregation of demand allows them to extract economic rents from suppliers.

    This business model is attractive to new entrants because it allows them to aggregate product innovations while focusing on customer navigation and advice. A good example is Belgium-based fintech banqUP. It offers a current business account, credit and debit cards, and business apps in a unified small- business banking platform. Another is the UK challenger bank Starling, which has moved to offer a wide array of third-party products and services anchored on a core current account.

    For incumbent banks, the economic equation of becoming an Open Platform Player can be more challenging. While an open model offering best-in-breed products can be enticing for customers, replacing balance-sheet income with fees isn’t always an attractive trade-off. A $ 100,000 mortgage with a three-percent net interest margin is equivalent to a lot of traffic on a toll road. So rather than pivot completely to an open platform model, we are beginning to see established —like HSBC and RBS in the UK—experimenting with the introduction of third-party products that they either can’t produce as well as other providers, or which, for risk appetite reasons, they may not want to provide. In the US, for example, eight of the top 10 banks now have some sort of alternative credit provider for small-business lending that falls outside their risk appetite, creating an emerging platform model in that segment.

    Read the report

    Of course, in an open platform model, there must also be suppliers. While fintechs like Transferwise are most prominent, there is also scope for traditional banks to componentise their product offerings and create APIs that allow easy plug-and-play with open platforms. This export model, where the customer interaction is ceded to a platform owner, requires changes in how a bank deploys its resources, people and . For example, the focus of relationship managers and banking sales representatives would need to evolve to emphasize B2B customers, developers and community builders, rather than B2C interactions. It also means excelling at broader skills, such as ecosystem analytics, API security and identity management.

    While becoming an Open Platform Player may look attractive to both new entrants and incumbents, it is interesting to ask the question of if the open platform bank is just an intermediate point on the journey towards lifestyle platforms, on which financial services are just one of many offerings.

    Speculation is rife that Amazon will begin to offer a wider array of retail financial services products—including a checking account—which may pay no interest but instead offer discounts on other Amazon products and services as compensation for holding your balances in that account (balances which could be insured by them being held on a regulated bank balance sheet). In China, the WeChat messaging app has already become a true lifestyle platform where consumers are able to conduct a huge array of financial and non-financial transactions without leaving the app. In this world, the “Alibabas” and “Amazons” may truly become the “everything” stores through which we run our lives.

    In an era of increasing fragmentation, banks could choose to establish Open Banking platforms that focus on financial services aggregation. However, we suspect that many banks will accept that competing against the likes of WeChat, Amazon and other bigtechs of the world is a losing proposition, and decide to focus on being a product supplier instead of trying to hold onto managing the customer relationship.

    I invite you to read more about open platform banking in A New Era: Open platform banking

    The post Banks as open platform players appeared first on Accenture Banking Blog.

    Accenture Banking Blog

  • user 3:35 am on June 22, 2018 Permalink | Reply
    Tags: , , , , , Open   

    Open Banking framework comes to Australia 

    Countries across the world are gradually following in the footsteps of in the UK and PSD2 in the EU, given the vast future potential offered by these schemes. In , the federal government has agreed to implement the recommendations made by the Open Banking Review team chaired by Scott Farrell, for the regulatory under which an Open Banking regime would operate. And initially, the four major in Australia have been mandated to make banking data available to TPPs (third-party providers) by June 2019.

    It is designed to give customers more control over their information, leading to more choice in their banking and more convenience in managing their money—thus resulting in more confidence in the use and value of an asset mostly undiscovered by customers: their data.

    One could consider the UK’s Open Banking technical specification as an example approach. Specific API design principles—such as redirect-based authorization and authentication flow—have been taken as the starting point for setting data transfer and authentication standards in Australia, though these would be adopted only with appropriate considerations.

    Highlights of Australia’s Open API framework

    • The scope of data that must be shared by data holders includes customer-provided data, transaction data and product data (e.g., fees and charges).
    • Value-added customer data or aggregated data sets are not required to be shared.
    • The product range included in the scope is very broad across a large range of deposit and lending products for both retail and business customer segments.
    • Data transfer would be completely free of charge.
    • The data recipient can rely on the outcome of an identity verification assessment performed on the customer by data holders.
    • Tiered accreditation system for data holders and data recipients will be based on the risk of data sets and participants—and with regards to existing license regimes for accreditation—would reduce costs for many participants.
    • Multifactor authentication is considered a reasonable security measure. Any authentication measure adopted should be consistent with authentication requirements in direct interaction between the data holders and their customers.
    • Screen-scraping is not restricted, but the alternative access mechanisms will be made very efficient, which will make screen-scraping redundant.

    Contrary to PSD2 and UK Open Banking, Open Banking in Australia is part of the Consumer Data Right. The CDR will give consumers greater power to control their data—and banking is the first sector in which it will be applied. So, the focus of all the developments is to form a single, broader framework which is interoperable across sectors apart from banking. The Farrell Review has given special consideration to how Open Banking is going to work with existing laws and systems such as the Privacy Act, Competition and Consumer Act 2010, and Anti-Money Laundering law to avoid any uncertainty and ambiguity.

    Other differences include&;

    • Australia’s Open Banking use cases are limited in terms of functionality, as it allows only read access, which limits payments initiation/write-access functionality—unlike UK Open Banking and PSD2, where it is allowed. However, in terms of accounts in scope, Australia includes more accounts (such as lending accounts) while these are not included in UK and PSD2. These are differences in the scope of the use cases:

    • Introduction of Australia Open Banking is divided into phases, starting with four major Australian banks at the outset and the remaining Australian Deposit-taking Institutions (ADIs) to comply within the following year—unless the Australian Competition and Consumer Commission (ACCC) determines a later date for them. In this way, ADIs will be able to benefit from lessons learned through earlier phases. The UK’s Open Banking implementation is not divided and is open to competition for all nine major UK banks from the very beginning. PSD2 is applicable to all banks in the EU that offer online-accessible payment accounts.
    • Australia’s Open Banking framework recommends standardizing APIs for data transfer similar to UK’s framework, while PSD2 leaves it to banks to decide what kind of interface they want to use. For PSD2, initiatives such as the Berlin Group’s NextGenPSD2 aim to close this gap.
    • In Australia, all Open Banking standards (transfer, data, security, and customers’ and participants’ experience) will be set by a Data Standards Body. This is comparable to the UK’s framework with the Open Banking Implementation Entity (OBIE); while in PSD2, standards are not centralized and are comparatively fragmented.
    • In Australia, Open Banking will be supported by multiple regulator models by the ACCC (competition and consumer issues, standards setting), OAIC (privacy protection), ASIC, APRA and RBA and other sector-focused regulators (advice as required). UK is regulated by CMA (for the nine largest banks) with standards set by the UK Open Banking Implementation Entity and regulated by EU’s PSD2 (for all UK banks). In PSD2, National Competent Authorities (NCAs) regulate and control the banks in their national markets with regards to PSD2 compliance.
    • Due to various legal complexities, Australian customers will not have the right to request deletion of their personal information under the Privacy Act, while in UK Open Banking and PSD2, it will be allowed under GDPR implementation.
    • Under the Australian regulation, third parties that participate in Open Banking will also be obliged to share their customer data, which is different from PSD2 and UK Open Banking.

    Australia has taken a very structured approach in planning for Open Banking to work with existing regulations and incorporating lessons learned. It has also addressed considerations such as customer education, dispute resolution, the ACCC breach reporting obligation and post-implementation assessment to make Open Banking more effective in Australia.

    The post Open Banking framework comes to Australia appeared first on Accenture Banking Blog.

    Accenture Banking Blog

  • user 12:52 am on June 8, 2018 Permalink | Reply
    Tags: , , , , , , Open, ,   

    Finastra Develops An Open Platform For Banking Apps 

    ‘s offers a way for financial services institutions to innovate faster, and way for firms to partner with .
    Financial Technology

  • user 3:35 am on May 26, 2018 Permalink | Reply
    Tags: Automating, , , , , Open, , , wide   

    Automating bank operations? Keep eyes wide open 

    Customer experience is the grand basis of competition in today’s business world. Unfortunately, most financial services institutions remain mired in manual, bespoke, paper-based processes—often siloed by customer, channel and product groups within a . That is beginning to change.

    RPA can reduce time to perform tasks by up to 90% and lower costs by up to 80%

    Read the report
    Read the report

    A key theme from Accenture’s recent survey of 80 bank COOs in North America is the need for back-office to become more digital and to act as the new front office. The survey report highlights several opportunities for to improve their operations—such as re-skilling back-office workers, creating agility through digital decoupling and robotics process automation (RPA). Sixteen percent of bank COOs we polled are using RPA, while 63 percent plan to use it over the next year or are piloting the . Half of those surveyed are looking towards straight-through processing and almost 75 percent have or plan to use analytics and data automation to truly unlock latent value in operations data.

    This presents a unique opportunity for banks to accelerate the use of modern automation techniques given their fundamental ability to enhance the customer and employee experience.

    Why is automation so important for banks?

    Intelligent automation has the power to impact operations. Here are five key reasons why:

    1. Simplifies work routines. Not all work is created equal and in many banks simple work is intermingled with complex work. This can create issues such as process bottlenecks, complicated workflows and slow customer service. Separating the simple from the complex can go a long way in making bank interactions better for customers and employees.
    2. Reduces process re-work. Enabling repeatability, enhanced predictability and streamlining the process helps a bank reduce hand-offs. Couple this with synergies of combined human-AI skills to run the process as a highly efficient factory and the benefits grow exponentially.
    3. Improves work quality. Automation aims to reduce errors by eliminating human touchpoints and judgment for routine activities across the banking value chain.
    4. Enhances efficiencies. RPA can free up resource capacity to focus on higher value activities.
    5. Speeds up innovation and time to market. Increased throughput, lower re-work and fewer errors all result in quick turnarounds.

    Banks should start their automation journey with the goal to look beyond cost savings. Five keys for success:

    1. It’s not a one-size-fits-all. Organizational processes can be repetitive or event-based with different types of data exchange. Assessment of process types and data is required to plan and using RPA or intelligent automation will actually simplify targeted processes to enhance efficiencies.
    2. Cost is only one piece of the puzzle. Automate because you want to create an innovative employee experience by focusing your people on the right activities, thus reducing errors and eliminating re-work. And improve the customer experience and speed to market. Efficiency will be a collateral advantage, but it should not be the going-in driver.
    3. Draw on operational data to drive front-office behavior. Operations is a treasure trove of data—from complaints and service/product issues to customer life events. Data automation with advanced analytics can extract valuable insights that banks can use to delight customers by anticipating their needs based on past transactions.
    4. Think big but start small. Circumvent the product-versus-customer-versus-channel debate by selecting a starting area and get going. Deliver in sprints, build momentum and stay the course.
    5. Agility is a mindset. Work through sprints without over-studying the current state, and then reimagine how the future could work in the context of an automated process.

    The power of RPA to invigorate bank operations is real—reducing time to perform tasks by up to 90 percent and lowering costs by up to 80 percent, by Accenture estimations. Before jumping on the bandwagon, however, business and IT must join together to strategically plan an optimal journey to an agile bank future.

    Read our 2018 North America Banking Operations Survey for more insights.

    The post Automating bank operations? Keep eyes wide open appeared first on Accenture Banking Blog.

    Accenture Banking Blog

  • user 12:18 pm on May 13, 2018 Permalink | Reply
    Tags: , , , , , Open, ,   

    INV Fintech, Open Bank Project Collaborate to Offer Sandbox APIs 

    INV , the sister accelerator to Innovation, announced a partnership today with the Berlin-based Bank to provide and development services to the startup and its 13 partner companies. The sandbox will startups in the INV Fintech accelerator a secure digital space to access and incorporate bank data into their applications. [&;]
    Bank Innovation

  • user 12:18 pm on May 8, 2018 Permalink | Reply
    Tags: , , , , , Open,   

    Will AI Lead to Open Banking in North America? 

    EXCLUSIVE— As sweeps through Europe with the launch of PSD2, GDPR, and other regulations focused on transparency, American financial institutions might want to consider looking to or artificial intelligence for their own compliance challenges. This is according to Richard Arundel, general manager, North for financial provider Currencycloud, who noted [&;]
    Bank Innovation

  • user 12:18 am on May 4, 2018 Permalink | Reply
    Tags: , , , , Open, , , ,   

    Will Realtime Payments Push U.S. Banks Into an Open Banking Ecosystem? 

    Preparing for has pushed U.S. to engage with APIs and at a fundamental level. Look no further than core service providers such as Fiserv or Finastra, which are providing banks with API-driven platforms to integrate a realtime infrastructure. The use of these APIs has deeper implications for the U.S. [&;]
    Bank Innovation

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