apidays LIVE Singapore - Open Banking: A foundation for the new world by Bharat Bhushan

Open Banking,
the foundation for the new world!
1
Bharat Bhushan
CTO, Banking and Financial Markets, EMEA
bharat.bhushan@uk.ibm.com | @_bharat_

Contents
2
Industry Context
Approach to Open Banking
Value Creation and Use Cases
Operating Model and Reference Architecture

3
Disruptive forces
are shaping the
banking and financial
markets industry
Disruption from
the FinTechs
Expanded risks
for security and
fraud
3
Shareholder
demands
for improved
returns
Changing
customer
behavior and
expectations
Heightened
regulatory
compliance
burden
Digital
disruption from
Tech giants

Financial institutions are responding by…
ENHANCING CORE
PRODUCTS
BUILDING NEW
REVENUE STREAMS
OPERATIONAL
EXCELLENCE
CYBER CONTROLS
AND COMPLIANCE
NEW WAYS OF
WORKING

All industries are going through an open banking-like transformation
5

The new world for banks is about
client experience and be a part of
their customer’s life story!
6

7
Global Perspective on Open Banking
Regulation Driven:
Regions with Open Banking regulations
• Australia
• Brazil
• European Economic Area
• India
• Japan
• United Kingdom
Market Driven:
Regions driven by Banks, Fintechs, and Consumers
• Canada
• China
• New Zealand
• Singapore
• Sri Lanka
• Switzerland
• Turkey
• United Arab Emirates
• United States
Read the summary/ download the full report at
https://www.linkedin.com/pulse/global-open-banking-landscape-biao-hao/

Contents
8
Industry Context

9
Open Banking
ComplyCompete
Do nothing is no longer seen as an option for financial institutions that are currently not covered by the regulation.

10
Embed account aggregation and
budgeting as a part of the mobile app
Embed banking functions-as-a-service
in other industries
Build a platform
Launch a digital brand/ bank
Create ‘mega app’ to embed banking
and non-banking services through
partnerships
ComplyCompete

11
in other industries
Build a platform
partnerships
ComplyCompete

Image for illustrative purposes only

18
in other industries
Build a platform
partnerships
ComplyCompete

Marketplace
Banking
Open API
Banking
PSD2 The bank is a product
factory (producer of
APIs) that provides financial
products to other members
of the ecosystem who own
the relationship with the
customer and distribute
these products.
The bank provides the
banking license and the
ability to hold funds.
OFFERING
BBVA’s Banking as a Service solution allows companies to connect into a core
digital banking platform, through which they can access APIs including the Move
Money, Identity Verification, Account Origination, and Card Issuance , etc.
BBVA API_Market was the creation of an online process with an ‘API first’ vision,
leading to a friendly developer experience
ECOSYSTEM ALLIANCE
BBVA and Uber, leaders in their respective markets in Mexico, announced their
alliance, which sees BBVA launching an entirely new financial experience by
making its services available in a third party platform for the benefit of Uber
driver and delivery partners and their families.
Through the Uber application, Uber’s driver and
delivery partners – as well as their families – can
quickly and easily create a digital account linked to
the international ‘Driver Partner Debit
Card,’ directly receiving their earnings in a matter of
minutes.
BBVA’s Banking-as-a-Service
Unbundled
Banking
Integrated
Banking
22

23
in other industries
Build a platform
partnerships
ComplyCompete

Blockchain-based
microfinancing
27
220 small food vendors
receiving microloans across Kenya
Financing system
based on blockchain
Logistics platform for kiosks
and food stalls in Africa
Twiga foods working in partnership
with IBM Research

28
From disconnected and fragmented value chains…
Ecosystem PartnerCompanyFarmer
• Access to larger market
• Leverage technology to scale rapidly
• Farmer insights
• Preferred Service Provider
• Enhanced Market Share and service capability
• Bundling of products
• First mover advantage
• Digital loyalty management via wallets
• Better farm yield
• Informed decisions
• Single reliable source for product/services
Farm
EquipmentAdvisory
Services
Live Mandi
Seeds/
Fertilizers
Financing
Farmer
Logistics
…To a connected and synergetic ecosystem
Farm
Equipment
Advisory
Services
Live Mandi
Seeds/
Fertilizers
Financing
Farmer
AgriculturePlatform
Logistics
Backed
by digital
wallet
Baroda Kisan: A Vision for Farmer Ecosystem

29
in other industries
Build a platform
partnerships
ComplyCompete

IBM CONFIDENTIAL30
YONO “You Need Only One”
>60% new customer
acquisition in age group of 18-30 years
>75k per day digital customer
acquisitions, 4Mn active daily interactions
100+ partners onboarded onto
the online marketplace
Upto 65% conversion rate on Amazon
offers through YONO (higher than that of
Amazon itself!)
5x growth in PAPL* base with <
1% delinquency on PAPL portfolio
>10x growth in funds transfer, bill
payments, fixed deposit and card payments
* Pre-Approved Personal Loan
Watch the replay at
https://www.ibm.com/events/think/watch/replay/126550664/

Sep 2016:
Project
Initiation
Finalize Base
Architecture
Identify Minimum
Viable Product
Hardware,
Software
installation
Requirements
Garage
Continues
Start
Development
Requirements
Garage initiated
Test Bed creation
Eco system starts
API creation
Continue
Development
System
Integration
Testing
CUG
Launch
User Acceptance
Testing
Security
Framework
finalization
Public
Launch
ISD sign-off
25
journeys
Digital Bank
Online
Marketplace
Financial
Superstore
4-5 Journey launch every month
Continuous enhancements
Tap newer business areas
Modernize Architecture
32 Advanced Analytics
Models delivered
100+
journeys
v Nov 2017
2017 2018 20192016
The journey…
32

Contents
33
Industry Context

34
Consumer/ Retail Banking Business Banking
Be financially better off
Save time
Corporate services – Accounting, Taxation,
Cashflow, Treasury, HR
Admin services – Cleaning
Digital CXO services
Utilities – gas, water and electricity
Request to Pay
Pay later (Lending)
Save overdraft charges
B2B2C Payments
Platform for business banking
Aggregate and analyse multiple bank
accounts and provide insights
Help find better suited utilities –
mortgages, gas, water and electricity,
internet, media & entertainment
Compare and find suitable and affordable
financial products
Improve Savings, Tax, Investments, tips
and coaching on the value of money
Life Skills
How to create Value

Open banking opportunities and prioritization matrix
35© IBM Corporation
V
C
Value-driven use cases
V1 Account aggregation
V2 Budgeting
V3 Financial product matching
V4 Non-financial product matching
V5 Financial coaching/nudges
V6 Tax calculations
V7 KYC
V8 P2P lending/ matching
V9 Third party referrals
V10 Savings
V11 Identity provider
V12 Receipt management
Cross-industry use cases with embedded
banking services
C1 Mega App – YONO, WeChat, WhatsApp
C2 Embed B2B, B2B2C payment processing
C3 PoS lending
C4 KYC, Financial Crime services
C5 Current account as-a-service
Patriciate in or create a marketplace
M1 Retail
M2 eCommerce
M3 Agriculture
M4 Travel and Transport
M
• Marketing
• Customer Loyalty
• Loan Financing
• Equity Actions
• Foreign Exchange
Business
• eCommerce
• Payments and
Settlement
• Investments
• Loan Origination
• Funding Monitoring
• Product Sale
• Account Opening
• Information Enquiry
• Loan Servicing
Impact
Complexity
V2
M1
V3
V6
V5
M2
V1
V7V8
M3
V9
C1
V4
V10
C2
C3
C4
M4V11
C5
V11
V12
Customer Value
Categories of APIs

36
ComplyCompete
Developer Portal
TPP Onboarding
Fully integrated and secure APIs
API Sandbox
Consent and Token Management
Strong Customer Authentication
Transaction Risk Scoring
Regulatory Reporting

37
ComplyCompete
Developer Portal
TPP Onboarding
API Sandbox
Fully integrated and secure APIs
Consent and Token Management
Strong Customer Authentication
Transaction Risk Scoring
Regulatory Reporting

Contents
41
Industry Context

Target Operating Model
42
Organization Technology
Process
Governance &
Collaboration
Data &
Data Governance
IT
Processes,
Policies & Metrics
Risk, Compliance
& Control
Organization,
People & Culture
KYC / TM TOM Strategy
Open Banking Strategy
Organization Technology
Process
Governance &
Collaboration
Data &
Data Governance
IT
Processes,
Policies & Metrics
Risk, Compliance
& Control
Organization,
People & Culture
KYC / TM TOM Strategy
Roadmap for Change

Target Operating Model
43
An exemplar process for discovering and partnering with startups
Milestone
Activity
Discovery & First
Contact
Company & Solution
Qualification Technical Onboarding
Onetime charge
Playback
Sandbox
n weeks
n weeks
n weeks
Establish joint go to
Market Plan
Launch
n weeks n weeks n weeks
Part of
Core?
OEM
Activities
N
Y
Charging
model
SaaS
Agree Contract

Functional Reference Architecture (Phase 1)
44
5F-BNVJRUV
5F-BNVJRUV
Identity, Access and SCA Engine
HSM
Developer Portal
Core Applications and System of Record
KPI Dashboard
Notification Gateways
Mobile App SDK
Fraud Engine
Case Mgmt
SIM Swap
Check
Dispute Management
Contact Centre & Branches
Open Banking
Directories
eIDAS Registries
Payment /
Consent
Mobile Networks
Payment Schemes
ESB/ Orchestration Layer
Security Gateway
CRM
Regulators
Call back Services
Outside of the bank
Withinthebank
Third Party Providers
Reverse Proxy, CDN, Network & DoS Protection
Firewalls and Network Load Balancers
Outsideofthebank
SaaS Offerings
ZoS
Connect
PartnerseBanking
Partners

45
5F-BNVJRUV
5F-BNVJRUV
HSM
Developer Portal
KPI Dashboard
Mobile App SDK
Fraud Engine
Case Mgmt
SIM Swap
Check
Dispute Management
Open Banking
Directories
eIDAS Registries
Payment /
Consent
Mobile Networks
Payment Schemes
Security Gateway
CRM
Regulators
Call back Services
Outside of the bank
Withinthebank
Data
MicroServices
Experience
MicroServices
Outsideofthebank
SaaS Offerings
ZoS
Connect
Data
Cache
PartnerseBanking
Partners
event-driven messaging

46
5F-BNVJRUV
5F-BNVJRUV
HSM
Developer Portal
KPI Dashboard
Mobile App SDK
Fraud Engine
Case Mgmt
SIM Swap
Check
Dispute Management
Open Banking
Directories
eIDAS Registries
Payment /
Consent
Mobile Networks
Payment Schemes
Security Gateway
CRM
Regulators
Call back Services
Outside of the bank
Withinthebank
Data
MicroServices
Experience
MicroServices
Outsideofthebank
SaaS Offerings
Data
Cache
PartnerseBanking
Partners
ZoS
Connect
Product/
MicroServices
Standardise APIs

47
5F-BNVJRUV
5F-BNVJRUV
HSM
Developer Portal
KPI Dashboard
Mobile App SDK
Fraud Engine
Case Mgmt
SIM Swap
Check
Dispute Management
Open Banking
Directories
eIDAS Registries
Payment /
Consent
Mobile Networks
Payment Schemes
Security Gateway
CRM
Regulators
Call back Services
Outside of the bank
Withinthebank
Data
MicroServices
Experience
MicroServices
Outsideofthebank
SaaS Offerings
Data
Cache
PartnerseBanking
Partners
ZoS
Connect

48
Download here Download hereDownload here Download here

apidays LIVE Singapore - Open Banking: A foundation for the new world by Bharat Bhushan

Recomendados

Recomendados

Mais conteúdo relacionado

Mais procurados

Mais procurados (20)

Semelhante a apidays LIVE Singapore - Open Banking: A foundation for the new world by Bharat Bhushan

Semelhante a apidays LIVE Singapore - Open Banking: A foundation for the new world by Bharat Bhushan (20)

Mais de apidays

Mais de apidays (20)

Último

Último (20)

apidays LIVE Singapore - Open Banking: A foundation for the new world by Bharat Bhushan