Open Banking :

What Does The Future Hold?

April 2017
Open Banking : What Does The Future Hold?

The evolution of Open Banking…

Open Banking is the shift
from closed to open PAYMENT PROVIDERS
banking models.
IOT DEVICES
CUSTOMERS
Bank products, services, CUSTOMERS

functions and data

(including customer data) UTILITIES

are shared for use with 3rd

parties to add additional AGGREGATORS
value and create new OPEN BANKING MOVEMENT GOVERNMENT
business models.

BANKING BANKING SERVICE PARTNERS

TELECOMS
INSTITUTION INSTITUTION
Customer, Client, Bank Customer, Client, Bank
Product Data Product Data

CLOSED ECOSYSTEM OPEN ECOSYSTEM

LIMITED DATA ACCESS & SHARING BI-DIRECTIONAL DATA ACCESS & SHARING
MONOLITHIC BUSINESS MODEL DISTRIBUTED BUSINESS MODEL
BANKS AS PLATFORMS
BANKING AS A SERVICE FABRIC
Open Banking : What Does The Future Hold?

Emerging forces shaping the future of FSI

CONNECTIVITY REGULATION

UNBUNDLING OF
BANKING MODELS

CUSTOMER
COMPETITIVE
EXPECTATIONS
Open Banking : What Does The Future Hold?

Emerging forces shaping the future of FSI

PAYMENT SERVICES DIRECTIVE 2 (PSD2),

REGULATION
The new EU directive requires Banks to provide third-party
CONNECTIVITY access to customers accounts for both account information and
payment initiation via open APIs, starting 2018.

COMPETITION & MARKETS AUTHORITY (CMA)

UNBUNDLING OF
BANKING MODELS 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
CUSTOMER on a level playing field.
COMPETITIVE
EXPECTATIONS
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.
Open Banking : What Does The Future Hold?

Emerging forces shaping the future of FSI

EMERGENCE OF NON-TRADITIONAL PLAYERS

CONNECTIVITY REGULATION 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

UNBUNDLING OF EMERGENCE OF NEW SERVICE OFFERINGS

BANKING MODELS
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
CUSTOMER and cross-border payments solutions

EXPECTATIONS
COMPETITIVE
Open Banking : What Does The Future Hold?

Emerging forces shaping the future of FSI

HEIGHTENED EXPECTATIONS

CONNECTIVITY REGULATION 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.

UNBUNDLING OF MOBILE CONNECTIVITY

BANKING MODELS Fuelled by the always-on interconnected web and ubiquity of

mobile coverage, our favoured digital interactions are
increasingly mobile.

COMPETITIVE CONTEXTUAL SERVICE

CUSTOMER Customers increasingly expect intelligent, contextual services

EXPECTATIONS woven into their daily interactions. End-end services, not
products.
Open Banking : What Does The Future Hold?

Emerging forces shaping the future of FSI

Open API

By using APIs, organisations can rapidly assemble and launch

CONNECTIVITY new digital products and services by leveraging both internal

REGULATION 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.

UNBUNDLING OF Micro-Service Architectures

BANKING MODELS
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.
CUSTOMER COMPETITIVE
EXPECTATIONS 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.
Open Banking : What Does The Future Hold?

Key Impending Questions

Combined, these forces will require a paradigm shift HIGH
PRODUCT CHAMPION PLATFORM PLAYER
by traditional financial institutions to redefine their
role in the financial services ecosystem

Customer acceptance and adoption of new

Transformative business model where

propositions and service providers

traditional Bank services are
What will the the role of our bank in the unbundled, open augmented by a variety of offerings
banking landscape? through an ecosystem of providers
Niche, specialist providers (including offering customers tailored and

Finch and neo-banks) offering fine-
grained services & products
What will drive customers to maintain their relationship
with us vs. traditional and new competitors? Traditional incumbent banking model
with predominantly in-house products
and services offered through traditional
channels to distinct customer segments
What capabilities will we own to generate
differentiation from traditional and new competitors?
OPEN BANKING
context-sensitive services seamlessly
integrated into multiple touchpoints
Builder of market-leading capabilities
which are shared across multiple FIs
and intermediaries

How will we evolve our technical architecture to support our

changing role? SEGMENT OWNER UTILITY PROVIDER
LOW

LOW HIGH
Banks appetite for open platform
transformation
Open Banking : What Does The Future Hold?

Banking as a platform
Banks 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.

Channels
Presentation Layer

API Customer
Portal AISP PISP Partners Customers Things
Wearables Mobile Tablet Internet Kiosk ATM Teller Contact Centre

Closed Interfaces
Integration Layer

Message
Routing Protocol Handling Orchestration Security QOS API Management
Processing
External Web APIs { } API Ecosystem

Performance Account Content

Security Digital Marketing Illustration Engine Risk Profiling
Monitoring Aggregation Management
Business Layer

Communication Master Data

Live Chat Analytics Auditing Scanning & EIDV

“Open Banking & PSD2 are both a catalyst and

Manager Management Fraud Monitoring

Closed Interfaces
CRM Communities Wealth Retail Commercial Payments Logging
accelerator in this shift towards open services.
where maintaining flexibility and adaptability will be
Common Services
Closed Interfaces

critical.”
Data Layer

Customer Wealth Commercial Transactional Analytics Product

Example Reference Architecture Banking Other

Institution FS Institutions
Open Banking : What Does The Future Hold?

API Economy will require new capabilities

A 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

Training &
OAuth / Open ID API Management Deployment Rate Limiting Auditing
Documentation
API PLATFORM
CAPABILITIES Fraud Protection
Service
Orchestration & Caching Monitising
3rd Party
Governance
Provisioning
Aggregation

Analytics & Monitoring & Error

Access Control Routing Publishing Policy Enforcement
Reporting Handling

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.

API Management Vendors

Open Banking : What Does The Future Hold?
Open Banking : What Does The Future Hold?

Moment

Moment Vision Brand Promise

Money is just a part of life. Make it a part you don’t
worry about.
Our vision of Banking Of
The Future, centred on
financial services with a
human touch
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.
Open Banking : What Does The Future Hold?

Moment

Moment Vision Moment Accelerator

Our vision of Banking Of A reference architecture

The Future, centred on and set of components
financial services with a for building the bank of
human touch the future, today
Be conversational

Be human

Only ever show what’s useful

Learn. Constantly.

Empathise. Always.

Always think ahead.

Open Banking : What Does The Future Hold?

Moment Accelerator Capabilities

We are building a series of accelerator components based on our Moment Reference Architecture to cover a range of capabilities,
including:

Account Aggregation Categorising Goal Setting Actionable Insights Conversational Assistant

View all of your accounts in one
place from multiple institutions.
Includes deposit, savings, credit,
loan, mortgage, ISA, pension
Track your spending by category.
Categorisation is applied
automatically according to
default rules, which can be
extended and customised by the
customer.
Manage your budget by setting
and tracking your goals, whether
saving for a holiday or planning
your retirement
Smart, actionable insights based
on your spending habits, financial
position and optimised for you
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!
Open Banking : What Does The Future Hold?
 Open Banking : What Does The Future Hold?

Open Banking Readiness Approach

To 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 OPEN BANKING STRATEGY STRATEGIC VISION & POSITIONING

MARKET ANALYSIS
VALUE-AT-RISK ASSESSMENT
3rd PARTY PARTNERSHIPS
FINTECH ENGAGEMENT
OPEN BANKING COMPLIANCE (UK)
SERVICE METRICS API DELIVERY
PRODUCT & REF DATA API DELIVERY
JOINT DEVELOPMENT / HACKATHONS
STRATEGIC RESPONSE
PROPOSITION ORIGINATION

BUSINESS TRACK

2 PROPOSITION DEVELOPMENT CUSTOMER RESEARCH

CUSTOMER NEEDS & HYPOTHESIS
OPPORTUNITY GENERATION
OPPORTUNITY DEEPENING
CUSTOMER TESTING
RAPID PROTOTYPING
ALPHA TESTING
OPPORTUNITY REFINEMENT
BETA TESTING

DEFINE API REFERENCE BUILD / DEPLOY DEPLOY & LAUNCH RUN

ARCHITECTURE API INTEGRATION PLATFORM SANDBOX PLATFORM

INTEGRATION & API

3
PLATFORM ARCHITECTURE IMPLEMENT API FRAMEWORK PROVISION EXAMPLE APIS / TEST DATA RUN PLATFORM
SECURITY ARCHITECTURE DEFINE 3RD PARTY ENROLMENT PROCESS DEPLOY & LAUNCH PLATFORM MONITOR & TUNE SERVICE
PLATFORM SCAFFOLDING INTEGRATION PATTERNS BUILD DEVELOPER PORTAL OPEN ENROLMENT PROCESS EVALUATE AGAINST SERVICE KPIS
API MANAGEMENT SUITE
(CORE FOUNDATIONS)
TECHNOLOGY TRACK

4 OPEN BANKING DELIVERY API DESIGN

API POLICY DESIGN
API GOVERNANCE
API BUILD
API POLICY DEFINITION
API INTEGRATION
API POLICY CONFIGURATION
API DEPLOYMENT
RBS OPEN PFM DISCUSSION

Thank you