Open banking standards: The future of banks?: summary of the IKS (Internal Knowledge sharing) session held by Initio. Speaker: Mathieu Doyen, Business Consultant within the Digital Transformation service line.

1. Open Banking Standards
The future of banks?
11/05/2017
Mathieu Doyen
Business Consultant @ Initio
Digital Transformation Service Line

2. Agenda
1. Open Banking Standards – PSD2 Context
2. Open Banking Standards – In UK
3. Open Banking Standards - Data Model
4. Leverage for the industry
5. Open Banking Project
6. Key points & conclusion
7. Q&A

3. Open Banking Standards – PSD2 Context
• PSD I -> First PSD directive aimed to bring consistency and harmonization of the
European payment services.
• PSD2 -> Ambition to extend the legal platform of SEPA by opening the payment
market place to new competitors

4. Open Banking Standards – PSD2 context
This data sharing between client, bank, PISP and
AISP can be automated through the use of API. The
European Commission has granted authority to the
European Banking Authority to create a RTS
(Regulatory Technical Standard) regarding PSD2
recommendation on the content of data exchanged
through API’s
• The main regulatory innovation is aiming to allow a third party to manage data related to
payment initiation services (PISP) and Account Information Services Providers (AISP).
• The main regulatory innovation is aiming to allow a third party to manage data related to
payment initiation services (PISP) and Account Information Services Providers (AISP).
The UK Government’s Treasury Department
has already published in September 2014 a
paper outlining its “intention to deliver an
open Application Programming Interface
(API) standard in UK banking” 2 .

5. Open Banking Standards – In UK
• In the end of 2015, the Majesty’s Treasure (HM) of UK has requested the creation of a
working group on such topic: Open Banking Working Group (OBWG).
Goal of this organization : collect ideas and input from public & private
actors on the way how data can enhance the ability of citizen to make
transactions, invest or save money, help consumer to get more control
over their banking data and ease the market access for Fintech and other
financial companies, by the use of these data on behalf of clients and
customers.
• In comparison with PSD2 -> OBP is more data-driven
• Create a guide regularly pubished and updated : Open Banking Standards
• Collaboration with profit & non-profit organization, and government through
ODI structure

6. Open Banking Standards – Data Model
• Open Banking Standards - A framework on the data architecture that should be applied to
meet ambitions of UK government in terms of banking innovation
• Qualitative program that fit with technical challenges of the market
 Put in place a secured environment to share data
 Data model already provided that can provide a good intercompatibility of banks with third
party services providers
 Inspired by Open Data architecture
“Access to private data through open APIs can only be given by permission of the data
owner (whether individual or business) only, subject to approved security and technical
standards”
Why this initiative is interesting?
1. Consistency of technical approach of data

7. Open Banking Standards – Data Model
Why this initiative is interesting?
1. Consistency of technical approach of data
2. Ownership of data defined
Who owns the data related to transactions? How to
manage the ownership if these data are shared
through open APIs?
• Use of Open License
• Have clear data literacy
• Client must be able to manage efficiently every data sharing. Customer has
to be able to give an explicit access to a specific data, and this authorization
has to be renewed regularly.
• Data dashboard

8. A leverage for the industry?
Consumers
Massive adoption of open banking standards will bring transparency and full access from
customers to their own financial data. It then allows a better visibility on the competition
and finds better tools or platforms to manage their money.
Industry – New challengers - Fintech
New challenger having an access to open bank data in a structured way, with a
comprehensive legal framework is an extraordinary opportunity from new challengers to
enter the banking market.
Industry – Traditional retail banks
The neo-banking approach suggested by OBS can significantly enhances the relation of the
client with the bank, improve a large variety of processes involving client, reduce costs,
highlights efficiencies and add value to their customer base. It increases the share of
knowledge for lending, and can provide a good base for fraud detectors monitoring.

9. Open Banking Project
• Private initiative
• Embraces the large majority of recommendations and specifications provided by the OBS
• Provides open source resources based on account holder’s transaction data.
• Available on GitHub
“The Open Bank Projects API abstracts away the
differences in banking systems and provides a
uniform technical interface so that software
developers can easily build secure services on top of
the bank”. Ibid.
Open Banking Standards
Open Banking Project
API App

10. Open Banking Project
Examples

11. Open Banking Project
 Give transparently options
InvestGlass
This innovative tool target wealth advisors, asset managers and private banks. It
integrate a robot advisor based on transparency rules. Decision and rationality
behind the tool are documented and is reflected is the base of the tool, inspired
by OBP tools.

12. Open Banking Project
 Enabling third party to build services & application
ForFirm
FORFIRM provides an online corporate banking PSD2 compliant, based on
OpenBank framework
Akoni
Specifically design for SME businesses, Akoni provides large-scale
corporate treasury solutions aimed to “ensures your cash is always
earning the best possible rates through our bank integrations and
rebalancing your accounts”. It demonstrates that OPB framework can
provide large solutions that goes beyond the tradition customer banking
interface

13. Key points & conclusion
Open Banking Standards
Open Banking Project
API App
• There already exists today frameworks, tools & APIs that could
be rapidly adopted by financial institutions.
• These set of OBP & OBS are PSD2 compliant and goes beyond in
terms of innovation, data model & architecture
• These UK initiatives are driven by Public–private partnership
• Aimed to evolve

14. Useful links & Article
• Open Bank Standards (2017), For Banks. Online Access:
https://openbankStandards.com/for-banks/.
• Open Banking Working Group (2016), The Open Banking Standard Unlocking the
potential of open banking to improve competition, efficiency and stimulate innovation.
• Open Bank Project (2017), About, Online Access:
https://www.openbankproject.com/about/

15. Appendix – News
Australia launch initiative that going be inspired by
Open Bank Standards in uk
http://www.innovationaus.com/2017/05/ScoMo-
gifts-bank-data-to-FinTechs/

16. Initio is the international brand of the French group Square

17. www.initio.eu
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2017