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Covid19 - A threat against traditional Banking

I would like to start this blog post by wishing all of you to be safe from Covid19 and wish all infected ones safe speedy recovery from the decease..
Due to the global pandemic situation,  'working from home' , "delivery food/goods to your homes" and importantly "purchases via digital money" have been become the norms for the situation. 
Thinking further this global epidemic situation has made a huge opportunity for banks on digitalizing projects. As I expressed earlier "purchases via digital money" is the norm which banks has to rethink about their current offerings.
For "purchases via digital money" ,Open Banking is the main capability that banks should have.Open Banking has become a global trend during last few years due to the regulations and obligations set by law in different regions as EU, AU. From the experiences with closely worked on open banking field the common observation which I felt was banks tried to become open banking compliant just for sake to be comply with the law. It was obvious that most of the time banks/financial institutes didn't understand the value of it. And now the time has come for banks to revisit their plans on Open Banking. Following questions and answers will help you to understand much more about open banking concept and how it's linked with digital money.

What's Open Banking?

 Making bank customer data to be open for third parties as secured APIs under bank customer's given consent.

What type of bank customer data can be open from open banking?


 What are the requirements that rise from bank customers with Covid 19 situation?
  • Do secured real time payments from bank customer account via a mobile app
  • Ability to check bank account details of multiple bank accounts from a mobile/web app
  • Ability to check bank opening hours and nearest branch/atm locations


 What are the requirements that rise from merchants with Covid 19 situation?
  • Since delivery option has become the norm ,it'll be a plus point if there's a mobile app/website link with the merchants with displaying selling items and also allowing online purchases.
  • Link online purchases with real time account debits addition to credit/master cards.

 How Open Banking will help to support the above requirements?
  • Once a bank exposed the above 3 data categories as secured APIs, then  third party mobile/web app developers can be utilize the APIs and integrate to their merchant application logic.
  • Let's say if multiple banks follow above step, then the app developers can integrate all APIs to one and bank customer can just utilize the mobile app and connect to his/her bank accounts of multiple banks from same mobile app.
  • And this will help the bank customer to be stay safe in home and utilize the merchant's mobile application to do online purchases and do digital payments.
What are the key features that expect from a Open Banking solution

What are the key challenges that a bank should consider when building an OB setup?

  • Time to market has to be fast. Thus it need to decide if the bank staff do have the required skilled set and speed to create the OB solution from scratch or it'll be easy to outsource for a separate vendor who do have already an OB solution.
  • Managing infrastructure has to be properly done. With the 'working from home' norm, cloud based solutions will match for infrastructure requirements with easy remote access. 
  • Cost factor for setting up the solution and maintenance also need to be considered.For example  proper resource utilizations with container based deployments as Kubernetes based setups will help to reduce the cost for VMs.

        Conclusion
  • To face the endemic situation better and to help community to be safe with proper isolation, it's really a responsibility and also an opportunity for the banks to be innovative and move forward with digital banking. Open Banking is the first footage for it and it can extend further digitally.        






Comments

  1. Advantage Financial Federal Credit UnionAugust 5, 2020 at 10:09 PM

    Interesting Post.It is valuable post.
    Thanks for sharing.
    Local banks in Washington DC

    ReplyDelete
  2. SunTec Business SolutionsOctober 26, 2021 at 10:26 PM

    api-based banking
    Personalize products, offers, pricing and loyalty programs; prevent revenue leakage and ensure regulatory compliance with a billing solution.

    ReplyDelete

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