open banking - what the future holds - deloitte us · open banking : what does the future hold?...
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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.
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 ?
Emerging forces shaping the future of FSI
REGULATION
COMPETITIVE
CONNECTIVITY
CUSTOMER EXPECTATIONS
UNBUNDLING OF BANKING MODELS
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 ?
Emerging forces shaping the future of FSI
REGULATION
COMPETITIVE
CONNECTIVITY
CUSTOMER EXPECTATIONS
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.
UNBUNDLING OF BANKING MODELS
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 ?
Emerging forces shaping the future of FSI
REGULATION
COMPETITIVE
CONNECTIVITY
CUSTOMER EXPECTATIONS
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
UNBUNDLING OF BANKING MODELS
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 ?
Emerging forces shaping the future of FSI
REGULATION
COMPETITIVE
CONNECTIVITY
CUSTOMER EXPECTATIONS
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.
UNBUNDLING OF BANKING MODELS
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 ?
Emerging forces shaping the future of FSI
REGULATION
COMPETITIVE
CONNECTIVITY
CUSTOMER EXPECTATIONS
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.
UNBUNDLING OF BANKING MODELS
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 ?
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?
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 ?
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
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 ?
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.
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 ?
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 ?
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.
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 ?
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.
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 ?
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:
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 ?
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 ?
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