The #World #Council of #Credit #Unions #helps #develop new #technology, like mobile banking, that credit unions need but cant afford to develop on their own.
Financial Technology
The move toward real-time #payments in the U.S. has been slow because regulators have not mandated that #banks go real-time.
Financial Technology
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.
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.
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.
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.
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.
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.
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.
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.
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.
#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.
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.
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.
Gone is the #world where a watch just keeps time and a refrigerator simply preserves food. From wearables and smart speakers to smart appliances, connected cars and #beyond, the Internet of Things (IoT) has gained the attention of consumers and businesses alike. At its most basic level, IoT is the network of “smart”, connected devices or products that enable new forms of communication and new experiences. The global IoT market is estimated to grow to $ 2.9 trillion with 20 billion connected devices by 2020.¹
IoT devices, combined with emerging payments capabilities, facilitate a connected commerce experience, providing consumers with a convenient way to transact by incorporating shopping and payments functionality into devices. For example, Amazon has enabled its customers to make purchases via its Echo devices using Alexa voice commands. Through the Groceries by Mastercard program, consumers can purchase grocery items through their Samsung refrigerators and have them delivered by the program’s grocery delivery services partners. Ford and ExxonMobil maintain a partnership to allow consumers to make Speedpass+ fuel payments through their in-car infotainment system.
The physical device is only one component of the infrastructure required to support IoT payments. It also must include a user interface, which is often a screen, but may also be a button, voice interaction, or geo-location. The IoT device must establish and maintain connectivity to a back-end platform that receives the data; this connectivity may be supported via Wi-Fi, Bluetooth or LTE. Payment credentials must be tokenized and maintained in a secure environment, either locally or in the cloud, and security is embedded through advanced authentication, often in the form of biometrics (such as voice command).
IoT payments require a coordinated effort through the device manufacturers, payment providers and #technology integration partners. Visa and Mastercard are seeking to accelerate IoT payments engagement and enablement as part of the companies’ respective digital payment readiness programs, Visa Ready and Mastercard Engage. Both efforts have focused on facilitating secure payments across the value chain and connecting IoT device manufacturers to financial institutions. Discover and American Express have also linked payment tokenization platforms and security protocols to third-party products (namely, wearables) to enable their cardholders to take advantage of IoT-based products and services. Such market activity represents a logical progression for payment networks to push new use cases for their tokenization offerings.
As expected with any new payments technology, IoT payments have a heavy focus on security. Large chip manufacturers (including NXP and Intel) have entered the space, providing secure elements to store payments credentials. Other entrants focus on innovative methods of enhancing payments security. MagicCube, which names Visa² and Mastercard among its partners, offers device manufacturers a trusted execution environment (TEE) security platform to provide payments security in lieu of a secure hardware element or software-based encryption.
It was not long ago that consumers, issuers, processors and networks were responsible for maintaining and securing only a single payments device: the card. As smart phones, refrigerators, watches and cars, among other things, become payment devices, card volume should start to migrate from the physical card to digital payments via IoT devices. Issuers must focus on developing strategies to ensure their cards remain top-of-wallet for consumers who make IoT purchases. Card networks are likely to continue facilitating partnerships with device manufacturers to optimize use of the emerging technology.
For traditional card processors, there may be an opportunity to enhance the processing of solutions with features to support device management. For example, card processors might use a data field that tracks the device (card, phone, watch, refrigerator) and authentication method used to make a payment, thereby increasing the opportunity for more insightful customer analytics. There may also be opportunities for alternative, non-card payment mechanisms (real-time payments, #blockchain/distributed ledger-based, and such) to take hold. We expect IoT payments to remain a key source of value, innovation and growth for both traditional payment providers and new market entrants.
I invite you to read more about Accenture’s capabilities and offerings in the IoT and Connected Commerce space.
Special thanks to David Cencula, who also contributed to this blog.
1 https://www.gartner.com/newsroom/id/3598917
2 Visa is also an investor in MagicCube
Jeff Crawford, Senior Manager, Payments
The post Beyond plastic: Payments in a connected world appeared first on Accenture Banking Blog.
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