IBS Journal May 2018
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“Also, if you choose the correct platform it is low-entry and there is no steep learning curve. Work that normally takes months to code can be done in a few days since the coding is so straightforward – it’s low-code. That sort of minimal outlay meant that we had quite a lot of time to experiment with new ways of presenting apps. Normally we would not have that ability to be creative.”
Cumming says: “Built from the ground up on our trusted, open technology stack, the
FusionFabric.cloud platform is gathering significant pace, signalling growing demand and energy within the industry for open innovation. It is a refreshing change in mindset that offers big benefits in terms of bringing new products to market faster and driving down development costs. The platform is very much part of our collaborative ethos and will ultimately change the way software is developed and deployed.” Thomson Reuters is currently embedding its instrument reference data into
FusionFabric.cloud.
Paul Sutherland, COO at BankBI said: “
FusionFabric.cloud enables us to access open application programming interfaces (APIs) to enhance the richness and efficiency of our solution. Tight integration to core banking data and the ability to develop on a cutting-edge platform, without having to write copious code offers significant advantage. Being part of this open innovation ecosystem affords us speed to market and increases our effectiveness, but more than that it reflects the future of development in financial services.”
True interoperability between partner interfaces is key. This is where fintech must be seen as an industry made up of companies that use new technology with added innovation and with available resources so that they can compete in the marketplace, particularly where traditional financial institutions and intermediaries in the delivery of financial services are dominant.
It is now the case for all financial organisations that they have to provide new ways to apply the innovation and skills of ‘Millennial-savvy’ fintech startups to their operations: how to marry their expertise in mobile app experiences with traditional banking applications to achieve platformification, or finance-as-a-service.
APIs play a key role in achieving these goals. Through APIs organisations can flexibly expose services and data, enabling these to be exploited to create new and innovative products.
What’s driving platformification?
Two main things are driving platformification: consumer demand and economics. Younger generations are active in managing their financial lives, and they want a wide range of tools and features at their fingertips in order to accomplish this. Unfortunately, it’s nearly impossible for one bank to be able to develop, launch, support and make profitable this many tools.
Non-banks often use much more nimble systems that allow them to respond more quickly to market changes. These systems enable them to collect customer data, which they can use to tailor their products and offer great customer experiences. Banks need this data for credit
innovation and customisation in scenarios that institutions cannot possibly predict
“
scoring and selling other products so a partnership would enable them to access it.
But fintechs have shown that they are a lot better at creating and offering exceptional front-end customer experiences, which are more in line with changing consumer preferences than the banks provide. They don’t, however, have the necessary infrastructure to run complicated payments systems. This explains why more than 80% of experts are encouraging industry collaboration in non-card payments and 75% in card payments, according to the results of a recent Deloitte survey.
Ben Goldin, CTO of Mambu says: “The biggest challenge banks face is ensuring that their architecture is API-enabled or created in a manner that allows them to expose APIs. This could mean working off an API- enabled core or in the case of older systems, putting time and resources behind building an API layer around the current platform.
“Another challenge, which is mostly organisational, is the need to break the silo mentality within the institution, changing their internal mindset so that different teams or businesses, components and systems are ready to embrace APIs and platformification and are able to communicate with each other. This opens up the institutions so that new propositions can be built on top of the institution’s current capabilities. This presents a world of possibilities – for partners and third-party developers, it provides access to the core platforms on which they can develop more innovative products and end customers benefit from enhanced products, services and more transparency, enabling them to better manage their personal finance.
Is it suitable for all major banks? “Yes it is and platformification is already being embraced in the form of Open Banking and due to the PSD2 regulation in Europe,” says Goldin. “As it is related to Open Banking and PSD2, platformification is already being implemented by banks in Europe. Outside Europe, we see countries like the UK, Australia and Singapore following suit with similar standards and regulation. Many institutions will pursue platformification voluntarily as they see the opportunities it provides. The technology allows for innovation and customisation in scenarios that institutions cannot possibly predict.
“The more people build on the solution, the more opportunities there are to differentiate. Almost like building an architecture without a precise end goal, it can take banks into different markets, open up innovation and allow the capability to build something unique. In time, the need to personalise services will become the new norm and institutions will find it necessary to fall in line. If managed like a product, an organisation’s core assets can be reused, shared and monetised, extending the reach of existing services or provide new revenue streams.” And that is why it is the future for all banks.
The technology allows for
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