Open Banking - What The Future Holds - Deloitte US · Open Banking : What Does The Future Hold?...

Open Banking : What Does The Future Hold?April 2017

O p e n B a n k i n g : W h a t D o e s T h e F u t u r e H o l d ?

The evolution of Open Banking…

AGGREGATORS

PAYMENT PROVIDERS

SERVICE PARTNERS

IOT DEVICES

UTILITIES

GOVERNMENT

TELECOMS

CUSTOMERS

BANKING INSTITUTION

LIMITED DATA ACCESS & SHARING

MONOLITHIC BUSINESS MODEL

Customer, Client, Bank Product Data

BANKING INSTITUTION

Customer, Client, Bank Product Data

CUSTOMERS

OPEN ECOSYSTEM

BI-DIRECTIONAL DATA ACCESS & SHARING DISTRIBUTED BUSINESS MODEL

BANKS AS PLATFORMS BANKING AS A SERVICE FABRIC

CLOSED ECOSYSTEM

OPEN BANKING MOVEMENT

Open Banking is the shift from closed to open banking models.

Bank products, services, functions and data (including customer data) are shared for use with 3rd parties to add additional value and create new business models.


Emerging forces shaping the future of FSI

REGULATION

COMPETITIVE

CONNECTIVITY

CUSTOMER EXPECTATIONS

UNBUNDLING OF BANKING MODELS



REGULATION

COMPETITIVE

CONNECTIVITY


PAYMENT SERVICES DIRECTIVE 2 (PSD2),

The new EU directive requires Banks to provide third-party

access to customers accounts for both account information and payment initiation via open APIs, starting 2018.

COMPETITION & MARKETS AUTHORITY (CMA)

Its report “Making banks work harder for you” published 9th August 2016 sets out a series of findings and measures

intended to help customers find and access better value

services and enable them to take control of their finances. This

will also enable new entrants and smaller providers to compete on a level playing field.

PENSIONS DASHBOARD (ABI)

Pensions dashboards should let you see all of your pension pots all together - in an online place that you can choose. The UK

Government’s objective is for the service to be available to

consumers by 2019.




REGULATION

COMPETITIVE

CONNECTIVITY


EMERGENCE OF NON-TRADITIONAL PLAYERS

The emergence of non-traditional players in the FS market,

largely from the FinTech community provides a threat to existing revenue streams and loss of direct customer

relationship

EMERGENCE OF NEW SERVICE OFFERINGS

The ability to gain access to bank and customer data opens up

renewed opportunity for new service offerings which provide

additional value to customers, ranging from PFM solutions, product comparison and fast-switching services, online lending

and cross-border payments solutions




REGULATION

COMPETITIVE

CONNECTIVITY


HEIGHTENED EXPECTATIONS

Modern digital & social experiences are redefining the

use of technology in our everyday lives. Customers have higher expectations on what their Banking service should

provide.

MOBILE CONNECTIVITY

Fuelled by the always-on interconnected web and ubiquity of

mobile coverage, our favoured digital interactions are

increasingly mobile.

CONTEXTUAL SERVICE

Customers increasingly expect intelligent, contextual services woven into their daily interactions. End-end services, not

products.




REGULATION

COMPETITIVE

CONNECTIVITY


Open API

By using APIs, organisations can rapidly assemble and launch new digital products and services by leveraging both internal

and 3rd party APIs

APIs hide the complexity of underlying functions, allowing business and technology partners to focus on building value-

added capabilities without being concerned with the internals.

Micro-Service Architectures

The emerging model of developing applications a suite of

independently deployable, small, modular services in which

each service runs as a unique process, is becoming standard

within the industry and further powering the API economy.

Scalable Next-Gen Infrastructure

The proliferation of cloud infrastructure-as-a-service (IAAS) and platform-as-a-service (PAAS) offerings in addition to new

offerings centred on rapid integration are further accelerating

the programmable web.



Key Impending QuestionsCombined, these forces will require a paradigm shift by traditional financial institutions to redefine their role in the financial services ecosystem

PLATFORM PLAYERPRODUCT CHAMPION

UTILITY PROVIDERSEGMENT OWNER

OPEN

BANK

ING

LOW

LOW

HIGH

HIGH

Transformative business model where traditional Bank services are

augmented by a variety of offerings

through an ecosystem of providers offering customers tailored and

context-sensitive services seamlessly

integrated into multiple touchpoints

Builder of market-leading capabilities which are shared across multiple FIs

and intermediaries

Traditional incumbent banking model with predominantly in-house products

and services offered through traditional channels to distinct customer segments

Niche, specialist providers (including Finch and neo-banks) offering fine-

grained services & products

Cus

tom

er a

ccep

tanc

e an

d ad

optio

n of

new

pr

opos

ition

s an

d se

rvic

e pr

ovid

ers

Banks appetite for open platform transformation

What will the the role of our bank in the unbundled, open banking landscape?

What will drive customers to maintain their relationship with us vs. traditional and new competitors?

How will we evolve our technical architecture to support our changing role?

What capabilities will we own to generate differentiation from traditional and new competitors?


Banking as a platformBanks will need additional & enhanced architectural, technical and operational capabilities to support innovation driven by emerging open banking concepts and challenger business models. This will include at a minimum API management capabilities integrated with the banks existing integration tier and security architecture.

Security Digital Marketing

Live ChatCommunication

Manager

CommunitiesCRM

Performance Monitoring

Analytics

Wealth

Illustration Engine

Master Data Management

Retail Commercial

Auditing

Account Aggregation

Risk Profiling

Scanning & EIDV

Payments

Dat

a La

yer

Wealth Commercial Transactional Analytics ProductCustomer

Busi

ness

Lay

erPr

esen

tatio

n La

yer Channels

Content Management

Fraud Monitoring

Logging

Wearables Mobile Tablet KioskInternet ATM Teller Contact Centre

Closed Interfaces

Closed Interfaces

Inte

grat

ion

Laye

r

Routing Protocol Handling OrchestrationMessage

ProcessingSecurity QOS

Common Services

Banking Institution

API Management

Other FS Institutions

Closed Interfaces

External Web APIs { }

AISP PISP Partners Customers Things

API Ecosystem

“Open Banking & PSD2 are both a catalyst and accelerator in this shift towards open services.

where maintaining flexibility and adaptability will be critical.”

API Customer Portal

Example Reference Architecture


API Economy will require new capabilitiesA variety of additional capabilities will be required, some provided by API Management vendor products whilst others will fall to organisations to architect and enable including delivery of underlying services, integration across all architectural layers and application of security protocols in accordance with emerging standards.

API Gateway Exposing Bank APIs Versioning Throttling API Support Enrolment

OAuth / Open ID API Management Deployment Rate LimitingTraining &

Documentation Auditing

Service Orchestration &

AggregationFraud Protection Caching Monitising 3rd Party

ProvisioningGovernance

Access Control Routing Publishing Policy Enforcement Analytics & Reporting

Monitoring & Error Handling

API PLATFORM CAPABILITIES

API Management Vendors

At Deloitte Digital we have established relationships with leading vendors in the API Management space (including Mulesoft, apigee, 3scale) and open source stacks including Zool.


Moment

Our vision of Banking Of The Future, centred on financial services with a

human touch

Moment Vision Brand PromiseMoney is just a part of life. Make it a part you don’t worry about.

What It Means

Little moments matter. And Money means different things to different people. We’re always thinking ahead, just like you. We use cutting-edge technology and a you-centred approach to solve as many little problems as we can.


Moment

Our vision of Banking Of The Future, centred on financial services with a

human touch

Moment Vision

A reference architecture and set of components for building the bank of

the future, today

Moment Accelerator

Be conversational

Be human

Learn. Constantly.

Only ever show what’s useful

Empathise. Always.

Always think ahead.


Moment Accelerator Capabilities

Account Aggregation Categorising

Track your spending by category. Categorisation is applied

automatically according to default rules, which can be

extended and customised by the customer.

View all of your accounts in one place from multiple institutions. Includes deposit, savings, credit,

loan, mortgage, ISA, pension

Goal Setting

Manage your budget by setting and tracking your goals, whether saving for a holiday or planning

your retirement

Actionable Insights

Smart, actionable insights based on your spending habits, financial

position and optimised for you

Conversational Assistant

Engage with your Banking service via an intelligent agent, whether

in-band within your mobile / online experience or via your

preferred chat agent. Need help, just ask!

We are building a series of accelerator components based on our Moment Reference Architecture to cover a range of capabilities, including:


Open Banking Readiness ApproachTo help organisations get up and running with Open Banking and a response to the exploding API economy we have a range of offerings which focus on both business strategy and proposition design through to technology implementation.

1

DEFINE API REFERENCE ARCHITECTURE

PLATFORM ARCHITECTURE SECURITY ARCHITECTURE INTEGRATION PATTERNS API MANAGEMENT SUITE

2

IMPLEMENT API FRAMEWORK DEFINE 3RD PARTY ENROLMENT PROCESS

BUILD DEVELOPER PORTAL 3

API DESIGN API POLICY DESIGN API GOVERNANCE

4

INTEGRATION & API PLATFORM SCAFFOLDING

(CORE FOUNDATIONS)

OPEN BANKING STRATEGY

PROPOSITION DEVELOPMENT

TECHNOLOGY TRACK

PROVISION EXAMPLE APIS / TEST DATA DEPLOY & LAUNCH PLATFORM OPEN ENROLMENT PROCESS

BUILD / DEPLOY API INTEGRATION PLATFORM

DEPLOY & LAUNCH SANDBOX

OPEN BANKING DELIVERY API BUILD API POLICY DEFINITION

API INTEGRATION

API POLICY CONFIGURATION API DEPLOYMENT

RUN PLATFORM

BUSINESS TRACK

RUN PLATFORM MONITOR & TUNE SERVICE

EVALUATE AGAINST SERVICE KPIS

STRATEGIC VISION & POSITIONING MARKET ANALYSIS

VALUE-AT-RISK ASSESSMENT STRATEGIC RESPONSE

3rd PARTY PARTNERSHIPS

FINTECH ENGAGEMENT

JOINT DEVELOPMENT / HACKATHONS

PROPOSITION ORIGINATION

CUSTOMER RESEARCH CUSTOMER NEEDS & HYPOTHESIS

OPPORTUNITY GENERATION

OPEN BANKING COMPLIANCE (UK) SERVICE METRICS API DELIVERY

PRODUCT & REF DATA API DELIVERY

OPPORTUNITY DEEPENING CUSTOMER TESTING RAPID PROTOTYPING

ALPHA TESTING OPPORTUNITY REFINEMENT

BETA TESTING

Thank youR B S O P E N P F M D I S C U S S I O N

Open Banking - What The Future Holds - Deloitte US · Open Banking : What Does The Future Hold?...

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