The Path to Open Banking

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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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OPEN APIs


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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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Date post:	22-Jan-2018
Category:	Economy & Finance
Upload:	mulesoft
View:	1,042 times
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The Path to Open Banking

Economy & Finance