Open Banking and the Need for Integration Technology

By Derek Thompson, Vice President EMEA,Dell Boomi 

 The introduction of Open Banking at the beginning of 2018 transformed the face of the UK’s financial services industry.

Designed to provide consumers with greater control over their financial data, and make it considerably easier to view and manage their finances, the new regulation allows customers to give permission for banks to securely share their financial data with third-party technology companies.

As a result, consumers are now able to view all of their bank accounts through one provider’s interface, for example, or make payments to online retailers directly from their account as a bank transfer.

While the move has provided a more seamless banking experience for consumers, it has forced traditional banks to invest further in their IT infrastructures in order to keep pace with their competitors and maintain relevance in the face of disruption from new online and mobile offering such as Monzo, Starling and Atom Bank.

Fragmented digital infrastructure and inflexible legacy IT systems can often hinder the attempts at a digital transformation by more established financial services providers. The development of cloud-based services, however, eliminates the need for organisations to introduce new hardware although it does introduce additional complexities with regard to integration. It’s important that businesses are able to integrate new services with existing applications without leaving them with a deluge of disconnected data.

To ensure they are able to successfully migrate their functions to a digital space, therefore, traditional banks require a reliable platform that will enable them to tap into and integrate the capabilities of a modern cloud platform which will fundamentally underpin the delivery of an improved customer experience while eliminating data redundancy.

Liquid expectations

Today’s consumers expect a seamless, friction-free interaction with a company’s products and services, whether that company is a bank, an energy provider, Amazon or Apple. The introduction of Open Banking has amplified these ‘liquid expectations’ with regard to financial services, and customers now expect range of engagement channel options. A monthly bank statement sent by mail is no longer sufficient, for example; customers now want to purchase new products, or activate or change services within a matter of minutes rather than days or weeks.

Traditional banks have, of course, been operating in a regulated environment for years, in which there has been little or no competition. As a result, meeting these demands will put new demands on their internal operations and processes. For banks to capitalise on the opportunity that Open Banking offers for an experience that puts the customer first across all available channels requires integration.

Each of the third parties that now has access to a customer’s account details, for example, will typically have their own touchpoints or individual business processes, and these applications will tend not to be integrated. Indeed, in the case of traditional banks, many will be decades old and have no public APIs.

Integration and orchestration

The ideal integration solution will pull together several modern applications and components essential in meeting today’s customer expectations. A front-end component, for example, presenting engagement channels such as Facebook, Twitter, web, email and phone will allow customers to contact their financial services provider via their preferred channel.

To ensure banks and third parties alike deliver an engaging and personalised customer experience, the solution should provide a 360-degree view of the customer, providing service agents with all the information on that customer and their interactions with the financial services provider in one place, regardless of whether those interactions took place online, over the phone, or by email.

The solution should employ an integration and orchestration layer to surface legacy system data and connect this with sales, service and marketing data, in order to drive efficiency and greater customer success. In addition, as many banks will have been essentially locked out of modern cloud platforms, because of their inflexible IT infrastructure and legacy systems, this integration layer should help them tap into and maximise the capabilities of the increasing range of SaaS applications.

Many banks and associated third parties will have separate organisations for handling customer care, and the provision and management of new and existing products and services, each of which may use different channels and distinct technology systems. As a result, customers may feel as if they’re dealing with three or four separate companies rather than one single, integrated entity. By integrating many of these processes, there will be a single source of data which will help create a consistent customer experience.

Open Banking has given customers greater control of their financial services than ever and, at the same time, increased expectations for a seamless experience. In order to meet these expectations, financial services providers must avoid being hindered by legacy IT infrastructure and make the most of the agility, speed and flexibility offered by developments in cloud technology. Only by implementing a reliable integration platform will they remain competitive, particularly in today’s disruptive technology landscape.

By Derek Thompson, Vice President EMEA,Dell Boomi 

 The introduction of Open Banking at the beginning of 2018 transformed the face of the UK’s financial services industry.

Designed to provide consumers with greater control over their financial data, and make it considerably easier to view and manage their finances, the new regulation allows customers to give permission for banks to securely share their financial data with third-party technology companies.

As a result, consumers are now able to view all of their bank accounts through one provider’s interface, for example, or make payments to online retailers directly from their account as a bank transfer.

While the move has provided a more seamless banking experience for consumers, it has forced traditional banks to invest further in their IT infrastructures in order to keep pace with their competitors and maintain relevance in the face of disruption from new online and mobile offering such as Monzo, Starling and Atom Bank.

Fragmented digital infrastructure and inflexible legacy IT systems can often hinder the attempts at a digital transformation by more established financial services providers. The development of cloud-based services, however, eliminates the need for organisations to introduce new hardware although it does introduce additional complexities with regard to integration. It’s important that businesses are able to integrate new services with existing applications without leaving them with a deluge of disconnected data.

To ensure they are able to successfully migrate their functions to a digital space, therefore, traditional banks require a reliable platform that will enable them to tap into and integrate the capabilities of a modern cloud platform which will fundamentally underpin the delivery of an improved customer experience while eliminating data redundancy.

Liquid expectations

Today’s consumers expect a seamless, friction-free interaction with a company’s products and services, whether that company is a bank, an energy provider, Amazon or Apple. The introduction of Open Banking has amplified these ‘liquid expectations’ with regard to financial services, and customers now expect range of engagement channel options. A monthly bank statement sent by mail is no longer sufficient, for example; customers now want to purchase new products, or activate or change services within a matter of minutes rather than days or weeks.

Traditional banks have, of course, been operating in a regulated environment for years, in which there has been little or no competition. As a result, meeting these demands will put new demands on their internal operations and processes. For banks to capitalise on the opportunity that Open Banking offers for an experience that puts the customer first across all available channels requires integration.

Each of the third parties that now has access to a customer’s account details, for example, will typically have their own touchpoints or individual business processes, and these applications will tend not to be integrated. Indeed, in the case of traditional banks, many will be decades old and have no public APIs.

Integration and orchestration

The ideal integration solution will pull together several modern applications and components essential in meeting today’s customer expectations. A front-end component, for example, presenting engagement channels such as Facebook, Twitter, web, email and phone will allow customers to contact their financial services provider via their preferred channel.

To ensure banks and third parties alike deliver an engaging and personalised customer experience, the solution should provide a 360-degree view of the customer, providing service agents with all the information on that customer and their interactions with the financial services provider in one place, regardless of whether those interactions took place online, over the phone, or by email.

The solution should employ an integration and orchestration layer to surface legacy system data and connect this with sales, service and marketing data, in order to drive efficiency and greater customer success. In addition, as many banks will have been essentially locked out of modern cloud platforms, because of their inflexible IT infrastructure and legacy systems, this integration layer should help them tap into and maximise the capabilities of the increasing range of SaaS applications.

Many banks and associated third parties will have separate organisations for handling customer care, and the provision and management of new and existing products and services, each of which may use different channels and distinct technology systems. As a result, customers may feel as if they’re dealing with three or four separate companies rather than one single, integrated entity. By integrating many of these processes, there will be a single source of data which will help create a consistent customer experience.

Open Banking has given customers greater control of their financial services than ever and, at the same time, increased expectations for a seamless experience. In order to meet these expectations, financial services providers must avoid being hindered by legacy IT infrastructure and make the most of the agility, speed and flexibility offered by developments in cloud technology. Only by implementing a reliable integration platform will they remain competitive, particularly in today’s disruptive technology landscape.