Digital Banking HUB's "Bank as a Platform" research results published in collaboration with GFT

Milan, Oct. 23, 2018

Conceiving services exposed through APIs as business products requires organizational and technological adjustments in an increasingly open and competitive ecosystem. These are just some of the evidences that emerged from the research activity promoted by CeTIF in collaboration with GFT Italia, which involved 15 Italian institutions in the Digital Banking Hub meetings.

Indeed, it is clear from this dialogue how banks will have to review their business and service models in order to remain competitive. The banking system has been wondering for some time now what business models will be able to address the changes, in part imposed at the regulatory level, in the way financial products and services are proposed and delivered. But while consumers will positively enjoy the innovations introduced by the PSD2 provisions, which are aimed at fostering competitiveness, banks must keep up, turning this obligation into an opportunity.

User experience at the center

The transposition of the European directive foreshadows the emergence of an ever-widening competitive ecosystem of players and financial service providers that, at least on paper, offer innovative user experiences. In an ecosystem that is mature and stable from a regulatory point of view, the viable solution for a financial institution could be to integrate services offered by third parties within its value chain, going so far as to become a third party itself, with the goal of identifying itself as the primary interlocutor for its customer in contexts of use once precluded to it.
"It istherefore appropriate to distinguish concrete threats, such as those emanating from the so-called Over The Top of the Digital Economy, from the opportunities inherent in collaborating with the multitude of entities that gravitate to the Fintech Universe and that are the most effective accelerator of innovation available to the banking sector," says Paolo Gatelli, Senior Research Manager as well as head of research CeTIF. "For a Bank, even just conceiving the service exposed through APIs as a monetizable object is a quantum leap but a necessary one.Monitoring and managing interlocutions in an ecosystem made up of more innovative and dynamic third parties is a challenge in which many are engaging, as is that of leveraging the immense wealth of information they possess."
Giants born and aligned with strategies to preside over the digital ecosystem, such as Amazon, to give a concrete example of a new comer, are structured to govern information flows, content and third parties in a way that constantly develops their business. They are able to orchestrate content, products and communications in order to generate a distinctive user experience.

Organizational and technological adjustments are needed

There is a need to introduce a series of organizational and technological adjustments that can enable the governance of this new way of banking, aligning information systems, business strategies and presiding over environments and use cases that fall outside the traditional business of collection and lending.
"The research is the result of a collaboration that has been going on successfully for several years and sees GFT and CeTIF actively engaged in the banking industry to interpret and guide business, technological and organizational evolutions. In this context of change, GFT stands as an expert system integrator specializing in new technologies to support clients in defining a model of intervention," concludes Franco Saracco, Sales Executive Director of GFT Italy,"accompanying them in all phases of the journey towards system renewal, guaranteeing regulatory compliance and always putting the customer journey at the center. In this scenario, with reference to Open Banking, we emphasize the importance of GRC (Governance/Risk/Compliance) risk control and the technological and architectural implications of the role of AISP (Account Information Service Provider) that a credit institution will be able to assume, based on PSD2 regulations."

Partnership strategiesto realize the "Platform of Services"

The evolution toward the concept of "Bank as a Platform" (BaaP), where the bank offers content and products of others in synergy with its own, with the aim of satisfying every need and context of use (in the manner of Netflix or the aforementioned Amazon), opens the way for new partnership strategies.
In particular, if the logic by which the platform is built allows third parties to expose and deliver services with a high degree of freedom, it will be possible for the bank offering it to develop new touch points and value-added services at a lower cost, especially by having information that is not typically made available, including access to the customer base. The hypothesis that is thus being set up is the bank's offering of a single environment (whether App or Web Banking) managed through APIs where the bank establishes itself as one of the entities capable of addressing an individual's financial or meta-financial needs, in synergy with other incumbents (insurance, telco, retailer, etc..) or fintechs.
The research found that large and structured banking groups prefer to experiment with partnerships with third parties to reap strategic benefits due to their speed of innovation and usability (e.g., Unicredit, Intesa Sanpaolo in Italy, BBVA in Spain); innovative banks, generally smaller and with a range of services offered that is not comparable to that of large groups, look to the ecosystem for a more generalist approach that allows them to achieve an integration of their offerings from a platform perspective (e.g., Banca Sella).

CeTIF The Center for Research in Technologies, Innovation and Financial Services (CeTIF) has been conducting studies and promoting research on the dynamics of strategic and organizational change in the financial, banking and insurance sectors since 1990. Each year it activates more than 15 Competence Centers and Observatories, in which the 10,000 professionals who make up the network of CeTIF can participate, and organizes more than 10 workshop dedicated to banking and insurance, with the aim of fostering among participants the exchange of experiences on specific issues and the adoption of innovative practices. Added to this are international research projects carried out in collaboration with leading università and analytical and research activity companies in the market. Its institutional partners include the Bank of Italy, ISVAP, ABI, ANBP, ANIA and CONSOB. In addition, CeTIF is a founding member of FIT: the European Association of Research Centers on Finance and Information Technology. www.cetif.it

As an experienced technology partner, GFT Technologies SE (GFT) is continuously committed to driving digital transformation in the financial services industry. With our extensive knowledge of this field, we advise the world's leading financial institutions and develop tailor-made IT solutions-from banking applications and trading systems to the implementation and support of comprehensive platforms, and modernisation of core banking systems. In addition, our innovation team, which operates globally, develops new business models, focusing on topics such as blockchain, cloud engineering, artificial intelligence and the Internet of Things, across all industries. www.gft.com/it

For more information

CeTIF

Lisa Jolanda Pasolini
Tel: 02.7234.8349
e-mail: lisajolanda.pasolini@unicatt.it

GFT Italy Press Office

Paola Sinigaglia
paola@paolasinigaglia.it
Mobile: +39.340.1065021 - Skype: paola.sinigaglia1

Dante Laudisa
Marketing & Communication Director GFT Italy
GFT Italy Via Sile, 18 - 20139 Milan (MI)
Tel: +39.02.581588613 Fax: +39.02.58158621
dante.laudisa@gft.com