Building the future of banking services with collaboration

Hans Tesselaar, executive director at BIAN, outlines how leading retail financial services organisations are leveraging APIs to exceed customer expectations

Rebecca Gibson
Rebecca Gibson
By Rebecca Gibson on 29 January 2019
Building the future of banking services with collaboration

This article was originally published in the Winter 2018 issue of The Record. Subscribe for FREE here to get the next issue delivered directly to your inbox.  

What are the biggest challenges facing banks today? 
Banks need to find a way to move from a ‘closed door’ proprietary approach to product and service development to a spirit of more open collaboration. The drive has been accelerated this year, following the introduction of the open banking reforms in January 2018. This is a new world order for banks, who have long been grappling with a legacy technology infrastructure – they must now get to grips with application programming interfaces (APIs).

What will it take to deliver the future of banking services?  
The reality of what it will take to deliver the future of banking services is complex. A typical bank has an extensive multinational branch network and provides customer access through all major channels and devices. Adding to this complexity, is an archaic and convoluted banking IT architecture, which makes it incredibly difficult for banks to categorise disparate core IT systems into clear business functions. Before they are able to do this, they cannot possibly create APIs.

What is needed to ensure success?  
BIAN’s goal is to drive this spirit of collaboration by bringing together some of the biggest, most innovative banks and technology vendors from across the globe to build a common IT architecture. Our new API Exchange is a critical component of this – this online digital library contains over 65 standardised API definitions. These will help to reduce the complexity of building and delivering open banking capabilities for banks, providing clear guidance on how to implement innovative and intuitive digital services across both back-end and customer facing functions. 

Clever use of standardised APIs will allow incumbents to collaborate with challenger banks, technology experts, and fintechs, with systems that are in sync, to launch services faster, and better meet customer demands for smarter and more ­transparent services. 

What does the future hold for API development? 
Looking ahead, the next phase of API development will focus on ‘micro-services’ – API-first banking capabilities which run independently from core banking systems. Micro services will provision banks to facilitate a ‘pick-and-mix’ approach to their offerings, allowing them to be more aligned to their customer base. In time, such a model could renew the core banking system and change the banking IT function forever. 

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