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THE PATH TO OPEN BANKINGHOW BANKS ARE ENABLING OPEN APIs
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INTRODUCTIONS
CHARLES BALDERS SENIOR MANAGER – DIGITAL INTEGRATION @ DELOITTE DIGITAL BANKING – ARCHATECTURE STRATEGY & SOLUTON DELIVERYDeloitte Digital Integration LeaderDigital Banking Platforms & Solution ArchitecturesAgile / LEAN Delivery
JAG BHOGALDIRECTOR OF ENTERPRISE ARCHITECT, COAST CAPITAL SAVINGSJag leads the architecture function for Coast Capital Savings. Jag has been working within architecture and technology function with financial and large corporations for over 20 years.
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AGENDA
TOPIC LEAD TIMING
APIs in Banking – Key Drivers & Trends Charles Balders 20 mins
APIs at Coast Capital Jag Bhogal 10 mins
Open APIs Charles Balders 15 mins
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APIs IN BANKING – KEY DRIVERS & TRENDS
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CONCEPTUAL API REFERENCE ARCHITECTURE Enabling APIs across the enterprise requires comprehensive API Management & Governance capabilities.
SERVICE CONSUMER SYSTEMS / APPLICATIONS / MOBILE APPS
API Portal
API Library / Documentation
Portal Administration
Community Tools
ENTERPRISE SYSTEMS / DATA STORES
DEVELOPERS
API Gateway Operations Management
Monitoring User Management
SLA Management Monetization
API
Man
agem
ent API Gateway (API Consumption)
API Proxy
Authentication
Policy Enforcement
Protocol Transformation
DEVELOPERS
Direction of flow of
response data and arrow end point denoting API consumer
Real-time / Batch / On Demand
Mul
tipl
e D
isti
nct
Inte
grat
ion
Laye
rs API Engine
Translation Mapping Rules Auditing API’s
Orchestration
Connectors / Adapters
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ModularityIncorporate patterns such as Microservices & Domain Driven Designs to abstract functionality and allow independent execution
VelocityAbility to rapidly incorporate changes and deploy to environments
ResiliencyAbility to recover from system failures/disruptions gracefully
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CLOUD NATIVE STRATEGY FOR API DEVELOPMENT With APIs frequently being used to expose core services and integration, adopting a cloud native approach provides the capability to rapidly develop, deploy & scale APIs .
ScalabilityHandle increases in usage & load without impacting performance or customer experience
CLOUD NATIVE
APPROACH
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DRIVERS FOR API ADOPTION IN BANKINGThe need to rapidly respond to changing customer needs and introduce new products & services is fuelling API adoption in the banking industry.
BACKEND Legacy Core Banking CRM
EXPERIENCE Mobile Responsive Web
Extreme Velocity to create Digital Experiences Replacing Physical
Need to incorporate new technologies e.g. FinTechs
Modernize legacy systems & integrations
Expose bank services in new ways (Move to OpenAPI)
API
API
PROCESS Service Originate Transaction
Creation of common ”OMNI Channel” capabilities (Decouple Experience!)
SYSTEM Insights Account Product Customer
FinTech
FinTech
FinTech
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API as a
PRODUCT
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ESTABLISH TECH-SAVVY PRODUCT OWNERS TO DRIVE API AGENDAPrior to embarking on API development, organizations need to ensure APIs have the clarity of a well-positioned product with a defined vision, value and audience.
API Management & Productization goes beyond just technology roadmaps, it’s a business strategy
PRICING, PACKAGING & MONETIZATION§ Establish pricing structures (e.g. by API,
by Customer, by Volumes)
§ Ascertain any bundling opportunities for market
API MANAGMENT§ Control versions of APIs available in the
market
§ Release updates/fixes to the market
PRODUCT ENGINEERING§ Devise features/use cases for the API
§ Define roadmap
§ Design, develop & test
DEVELOPER COMMUNITY§ Focus on Developer Experience
§ Forge community to use & innovate on API
PRODUCT SUPPORT§ Provide API documentation – technical,
functional
§ Offer ongoing support – forums
PRODUCT MARKETING§ Determine go-to market strategy
§ Identify target customers
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KEY FACTORS TO CONSIDER WHEN BUILDING OUT AN APIA holistic approach to development & delivery achieves the customer-centricity, modularity and velocity required for API products.
User Stories
Burndown
Leverage Agile Delivery
Demonstrable functionality per Sprint
§ Develop functionality iteratively in deployable increments
§ Increase efficiency through regular feedback cadences
§ Continuously design, develop, test, and integrate features for increasingly complete and stable builds
§ Foster highly collaborative and cohesive multi-discipline teams that interact regularly during Sprints
Cross-functional Scrum
Consider the Developer Experience (DX)
§ Take a developer centric view to design and delivery
§ Employ a design-led approach to craft meaningful user experiences
§ Design based on rigorous research & analysis
§ Build what is necessary and sufficient
§ Trust but verify – test with real customers
Wireframes
User Journeys
Personas
Mobile App
Single Responsibility Principle (Microservices)
§ Leverage-and-layer on top of existing assets and refrain from ripping & replacing existing APIs or data services
§ Minimize impact on existing IT, and create a new layer of agility to enable delivery of more functionality faster
§ Think multichannel and design device-agnostic and data-centric APIs
§ Focus on the business consumerwhen developing new APIs or reusing existing services
API Management Platform
API Design
Product-Driven Governance
§ Establish effective processes, policies & cadences to manage and monitor the build, test and delivery of components in an Agile environment
Project, Requirements Management
API Management PlatformCloud Hosting
Design for the Cloud
§ Leverage cloud infrastructure to enable the scalability, agility and availability needed to realize the value of Microservices and Continuous Integration and Delivery
Scalable distributed database
Build Automation
DevOps Enablement from the start
§ Reduce bottlenecks observed in the latter stages of the development cycle
§ Enable accelerated software build and deployments through DevOps empowered Continuous Integration and Delivery
§ Employ a toolchain to automatically provision environments and track, archive, compile, package, test and deploy code using pre-defined parameters
Continuous Integration
Automated Load Testing
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APIs AT COAST CAPITAL
Private & Confidential / Property of Coast Capital Savings 11
Coast Capital Savings Transformation Journey
“Digital Transformation
Journey across Canada”
Superior Employee Experience
Innovative & Competitive
Coast Capital is embarking on a digital transformation journey
q Accesstotherightinformationattherighttime
q Productivitysuites
q Strategicpartnerships(fintechs andtechnologyvendors)
q Investmentsinpotentialnewtechnologiesandbusinessmodels
Superior Member Experience
q Customercentricarchitecture
q Bankinganywhere,anytime
q Datadrivenenterprise
Flexible & Agileq Bestofbreedq Plug&Playarchitectureq Speedtomarket
Private & Confidential / Property of Coast Capital Savings 12
How Mulesoft is helping to drive transformation?
� EnhancesmemberexperienceviaAPIsandMicroservices
� Enablingquicktimetomarketduetothereduceddevelopmentanddeploymenttimelines
� iPaas solutionprovidessimplisticandquickapproachtospinningupnewenvironmentsasneeded
� Investigatingpartnershipoptionswithfintechs andanticipatingthatMulesoftplatformwillprovidethefoundationalAPIsforintegration
� AnewmethodofinteractionwithTech-savvycustomersandFintechs
� Newcapabilitiestoenablenewpartnershipsinthefinancialvaluechain
� Turnthebank’sservicesintoaplatformonwhichotherscanbuildvaluableservices
Superior Member Experience
Flexible & Agile
Innovative & Competitive
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HOW OPEN APIs IS DISRUPTING BANKINGOpen APIs enable an app to connect with multiple, different financial institutions, rather than having to use a different app for each organization, creating new ways for clients interact with their banks.
WITHOUT OPEN APIs
Bank
App
App
App
Online Banking
Bank
App
App
App
Online Banking
Bank
App
App
App
Online Banking
§ Different apps and user experiences for each bank
§ Digital connections with the client are direct, dedicated, and closed
WITH OPEN APIs
Bank
App AppAPI API
AppAPI
Open API
Bank
App AppAPI API
AppAPI
Open API
Bank
App AppAPI API
AppAPI
Open API
§ Disruption of traditional relationship between banks and their clients
§ Interoperability through APIs available to external consumers
Open API
Customer
AppOpen API
Open API
Regulated Interoperability
Platform BankApp AppAPI API
App
API
Open API
Open API
Banking-as-a-Platform
API as a Channel
Bank
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CASE STUDY #1 – APIs NEW CHANNELS FOR BANKING AND AJACENT SERVICES
Examples:§ App-to-App Payroll Services
§ App-to-App Payment Services§ Straight-through Processing
§ Clients accessing loyalty points
§ Clients accessing identity information for form-filling
Bank
App AppAPI API
AppAPI
Open API
Customer
AppOpen API
A Spanish Bank has created new opportunities by opening APIs in their European and the U.S. operations§ Hackathons: The bank’s move comes after having hosted several hackathons with sample
APIs using cleaned, anonymized copies of big transactional data § Fintech Incubator: The bank also has a FinTech incubator program that aims to support a
network of new startup partners
App AppAPI API
AppAPI
Open API Connect
Open API Identity
Open API Accounts
Open API Cards
Open API Money Transfers
Open API PayStats
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App
App
App
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CASE STUDY #2 – APIs AND BANKING-AS-A-SERVICE
An European Bank has created a banking and payments platform that it sells as a service to other banks, large online merchants, and web operators§ Full European banking license
§ Highly scalable platform allowing 2,000 registrations and 500,000 transaction per hour
§ Digital Multichannel approach for an enhanced and unique banking experience combining mobile, online and social media banking
§ Standardized interface (Open APIs) enables fast and easy integration of proprietary and third-party applications to increase customer value
Open API
Open API
Open API
Examples:§ Online Gaming Requirements§ Large Online Merchants§ eCommerce Support
Platform BankApp AppAPI API
App
API
Open API
Open API
Bank
Open API
API
API
API
Banking Services
Non-Banking Services
Payment Services
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CASE STUDY #3 – APIs AS AN ECOSYSTEM ENABLER
Examples:§ 360 view across all a client’s
financial relationships, § Transaction aggregation and analysis§ Non-bank intermediaries (e.g. digital
financial management, planning, advice, marketplaces)
One U.K. Bank sells other banks products and gives customers a single view and consistent user experience across all their banking relationships§ It is a mobile bank being built from the ground up
§ Only offering one product: A current account with a card)
§ BUT, using Open APIs, the Bank incorporates other bank’s products into their app, focusing instead on owning the user experience
Bank
App AppAPI API
AppAPI
Open API App
Open API
Fintech
App Open API
Open API
Open API
Open API
Open API
Open API
Open API
Accounts Open API
Cards Open API
Investments Open API
FX Open API
Loans Open API
Mortgages Open API
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CASE STUDY #4 – APIs AND REGULATED INTEROPERABILITY
Examples:§ In Europe Payment Services Directive
2 (PSD2) stipulates that bank customers should have the right to access their financial information and connect it in anyway they want putting an end to data protectionism with the Access to Accounts (XS2A)
§ The Midata legislation proposed in the UK
§ Central Bank of Singapore initiatives
Ultimately, banks may not have a choice of opening up APIs, as we have seen with PDS2 in Europe§ With PSD2, the client’s banking app does not have to come from their bank, or from any bank
§ The user experience is separate from any specific financial institution
§ Clients could choose the app experience they like best, and use that one app to access different banks and services in one place
§ The implication is that if clients are able to switch banks without changing their user experience, banking is being commoditized
Open API
Bank
App AppAPI API
AppAPI
Bank
App AppAPI API
AppAPI
Open API
Open API
Bank
App
FinTech
App
Financial Service
AppOpen API
Open API
Open API
Open API
Open API
Open API
Open API
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