BBVA API Market
Some weeks ago we took part in the World Open Banking Dialogue in London. There we heard first-hand how banks around the world are helping to consolidate the open banking concept, while we also had the opportunity to set out BBVA’s vision of the phenomenon. One of the key issues discussed at the event was regulation. While regulation has traditionally curbed the development of specific industries, in this case it is acting as a key driver to help open banking flourish.
Partnership between the banking sector and regulators has been indispensable to the development of open banking, ensuring that a framework has been established for progress going forward. A report entitled “Open banking: The race to deliver the Banking as a Service”, prepared by MIT Technology Review for Oracle, states this idea clearly. In the world of technology, “regulation often plays a catch-up role in putting guidelines around unfettered industry development,” says the study.
However, the executives interviewed for the report describe regulators as catalysts for change when it comes to open banking. Derek White, our Global Head of Customer Solutions at BBVA, was among those interviewed. “Several years ago, people would have never guessed that regulation would be one of the drivers of innovation,” he said. “Regulation is allowing and fostering and almost forcing innovation in open banking.”
Derek White believes this has been shaped by two other trends. The first being a blurring of industry lines and the growth of “new economy” services. The second being consumers who are increasingly interested in understanding and controlling their data and digital footprint. “The PSD2, as well as the GDPR,” he said, have created a “starting point for companies to think about the data that they capture today that they don’t necessarily own.”
This is set to create a paradigm shift over the coming years in how banks deal with the issue of ownership, storage and use of the data that they capture. “Open banking allows individuals to have greater clarity and understanding of their data, port their data, move their data and control who has access to their data. And potentially in the future, have greater control over how that data is monetized,” added.
This represents an opportunity to work side-by-side with the figure that stands (or should do in any successful strategy) at the heart of our operations and value proposition: the customer. Said figure holds the key, given that banking customers in the 21st century are particularly fluid. Their profile can shift based on far more dynamic parameters than in the past: the time of day, what devices are used to access accounts, their state of mind, the time of year, and so on. So how can we best adapt to this chameleon reality? At BBVA, as well as other ideas, we have opted to harness banking ecosystems based on APIs.
It is evident that today many banks already have a clear idea of why and how to secure a successful open banking strategy. In fact, open APIs topped the list of technologies having the greatest influence on the financial industry.
For example, a very recent study from The Financial Brand asked banking executives which technologies they expect to have the greatest bearing on the industry this year, with the top answer being open APIs. Left trailing behind were other powerful trends in this and many other industries, including artificial intelligence and machine learning, as well as conversational interfaces. These results coincide with those of another study, this time from MIT, indicating that the key trend in 2019 would be the elimination of all friction along the Customer Journey, in which APIs will certainly play a major role.
APIs and open banking unlock a world of possibilities, in which novel business models may be explored and new digital experiences created for our customers. They are ushering in sweeping change, as we have seen in this text. And they are here to stay. This means partnership and open collaboration are no longer an option, but a prerequisite to remaining competitive.
The cash flow and payment management departments must consider the way in which payments to suppliers are made, because each type of payment has its own advantages or is better suited to the company’s strategy, the relationship with the supplier, or the respective needs of both. Far from being a trivial matter, choosing the payment […]
Businesses, from self-employed to SMEs and large companies, need financing solutions that suit their needs. Leasing is a method that can optimize the use of resources and which combines business liquidity (or lack of) with the use of assets. What is leasing and how does it work? Leasing is a financing method by which a […]
An API is a very useful mechanism that connects two pieces of software equipment to exchange messages or data in a standard format such as XML or JSON. Thus, it becomes an instrument that can be used to search for revenue, open the doors to talent or innovate and automate processes.
