Introduction to essential elements of Open Banking Framework, Anuj Agrawal, APAC Open Banking Lead Analyst, IDC

1. OPEN BANKING

2. Essential
Elements of
Open Banking
Framework
Anuj Agrawal
APAC Open Banking Lead
IDC Financial Insights

3. 3 Things You
Thought ‘WRONG’
About Open Banking
3

4. Open Banking or Open Insurance means sharing
of customer financial and sensitive data which
may be compromised
99.99%
#1
Banks/Insurance companies across Asia/Pacific which have
progressed with Open Banking/Open Insurance are not
sharing customer data in any form without their consent
4

5. As a bank I can wait, watch and start later#2
7 out of 10
Improve
Operational Efficiency or
Customer Reach
Open Banking Adoption
35%
80%
2017 2020
60%
2019
5

6. No bank has been able to benefit from
Open Banking yet
#3
Expand Market Reach
Innovate and expand
Earn income by improving
operational efficiency
Expand ecosystem to
increase transactions
Better Customer Profiling & Credit
Decisioning to save on losses
Note: Highlighted names are
indicative not exhaustive
6

7. What is
Open Banking?
7

8. Open
Collaborate
to
Open
Datafor
Platform
Open
OtherIndustries
to
8

9. 9
OpenBanking
is a way by which banks allows
controlled access of customer,
products, and service related
information to external partners for
improving or reassembling their
products & services using
Open APIs

10. 2 out of 10
Have progressed with building
robust framework around
Open Banking

11. 6 Elements of Open Banking Framework
Build
11
Partner
Connect Secure
Govern
Monetize

12. 6 Elements of Open Banking Framework
Build
Partner
Connect
Govern
Secure
Monetize
12

13. 13
Simple,Useful&
ReusableAPIs Update,
Innovate
Manage
Improve
Deployment TAT
Develop
13

14. 6 Elements of Open Banking Framework
Build Open
APIs
Connect
Govern
Secure
Monetize
Partner
14

15. Partner
As a Service
Provider
Bank Fintech/TTP
As a Co-branded
Partner
‘FriendsandFamilyFirst’
Intelligently
15

16. 16
5 out of 10
Tier 1 and 2 banks will
offer at least 5 external
retail banking APIs in 2019
Retail Banking
1 out of 10
Tier 1 and 2 banks will offer
at least 3 external corporate
banking APIs by 2020
Corporate Banking
Bank-as-a-Service

17. 17
FINANCIAL INFORMATION
1. Account Balance
2. Auto Loan Exposure
3. Credit Card Limit
4. Credit Card Spends
5. Home Loan Exposure
6. Investment Portfolio
7. Personal Loan Exposure
8. Transaction History
LOAN-RELATED APIs
9. Pre-approved Auto Loan
10. Pre-approved Home Loan
11. Pre-approved Personal Loan
LOYALTY & REWARDS
12. Reward Points Management
13. Rewards Point Calculator
NON-FINANCIAL INFORMATION
15. Customer Details
16. Product Availed: CASA Products
17. Product Availed: Investment Products
18. Product Availed: Loan Products
19. Account Aggregation
TRANSACTION-RELATED APIs
20. Business Accounts Access
21. Card Authentication
22. Card Payment Management
23. Instant Refund/Settlement
24. Transaction Scheduler
25. Payment Initiation and Authorization
26. Remittance Authorization
27. Remittance Exposure
LOCATION-DRIVEN APIs
28. Infrastructure Location Management
29. Offers Near Me
30. Pre-approved Property Search
PRODUCT INFORMATION
14. Product Terms and Conditions
FINANCIAL INFORMATION
1. Credit Exposure Details
2. Credit Transaction Details
3. Business Account Access
4. Investment Portfolio
5. Cash Management
6. Bank Exposure Consolidation
CREDIT PRODUCT RELATED
7. Pre-approved Cash Credit Limit
8. Pre-approved Invoice/Bill
Discounting Limit
9. Invoice/Bill Discounting
10.Loan Re-structuring
NON-FINANCIAL INFORMATION
11. Customer Details
12. Products Availed: Credit Products
13. Products Availed: Non-Credit
Products
14. Relationship Aggregation
TRANSACTION-RELATED APIs
15. Corporate Bill Payment
16. Merchant Card Payments
17. M2M Payment Management
18. C2M Payment Management
19. Transaction Scheduler
PRODUCT INFORMATION
20. Product Terms & Conditions
20 Most Common Open Banking APIs in
Corporate Banking
30 Most Common Open Banking APIs in
Retail Banking
Most Common Open Banking APIs
Source: IDC Financial Insights
17

18. Low High
High
Low
Harvest
Financial Information APIs
Strategize
Leverage Circumspect
Loan Related APIs
Loyalty & Rewards APIs
Non-Financial Information
APIs
Transaction Related APIs
Location Driven APIs
Low High
High
Low
Product Information APIs
Account Balance
Auto Loan Exposure
Credit Card Limit
Credit Card Spends
Home Loan Exposure
Investment Portfolio
Personal Loan Exposure
Transaction History
Pre-approved Auto Loan
Pre-approved Home Loan
Pre-approved Personal Loan
Reward Points Management
Rewards Point Calculator
Customer Details
Product Availed: CASA Products
Product Availed:
Investment Products
Product Availed: Loan Products
Account Aggregation
Business Accounts Access
Card Authentication
Card Payment Management
Instant Refund/Settlement
Payment Initiation and
Authorization
Remittance Authorization
Remittance Exposure
Transaction Scheduler
Infrastructure Location
Management
Offers Near Me
Pre-approved
Property Search
Product Terms and Conditions
Associated Risk / Investment
DerivedValue/Benefit
High Value – Low Risk High Value – High Risk
Low Value – Low Risk Low Value – High Risk
APIsPrioritizationMatrixMusthaveexternalAPIs
18

19. 6 Elements of Open Banking Framework
Build Open
APIs
Govern
Secure
Monetize
Create and Sustain
Partnerships
Connect
19

20. 20
10%
of banks worldwide will have allocated at least 5% of IT
budgets in next 2 years toward connecting corporate
and retail banking core systems to improve credit
decisioning and customer experience
EXTERNAL
PROCESSES
Connected
Processes
Assets
People
INTERNAL
PROCESSES
Mobile
IoT
AR/VR
BOT
API
CONNECTED
CORE
INTERNAL&EXTERNAL
PROCESS

21. 21
Cross-FunctionalManagementTeam
Set-up a
21
IT
Product
Marketing
Analytics
‘ADigitalTeam’
The team that can understand the
challenges not only of API
developers but also of the
business and marketing manager.

22. 6 Elements of Open Banking Framework
Build Open
APIs
Govern
Monetize
Create and Sustain
Partnerships
Connect Internal
and External
Processes
Secure
22

23. 8 out of 10
Asia/Pacific Banks are
concerned about
Customer Data Privacy
and Cybersecurity
SECURE
23

24. 24
35 PERCENT
API Management Platform
Adoption in 2019
AnAPIManagementPlatform
Optimize your efforts
with
LOWER
COST
REUSE, SCALE,
UPGRADE
CONTROL,
MONITOR
SECURITY
CENTRALIZED
VIEW
24

25. 6 Elements of Open Banking Framework
Build Open
APIs
Monetize
Create and Sustain
Partnerships
Connect Internal
and External
Processes
Secure Data
and APIs
Govern
25

26. 26
Early
Adopters
Singapore
Australia
Hong
Kong
Steady
Warm-
ups
India
South
Korea
New
Zealand
Fast
Followers
Thailand
Malaysia
Giants
with
Potential
Japan
China
GOVERN
26

27. 6 Elements of Open Banking Framework
Build Open
APIs
Create and Sustain
Partnerships
Connect Internal
and External
Processes
Secure Data
and APIs
Strengthen API
Governance
Monetize
27

28. 8 of 10
Asia/Pacific banks consider
Data Monetization as one of
the most important factor for
success in Open Banking
6 of 10
Asia/Pacific lacks the ability
to monetize from data,
citing Open Banking as
major challenge
CREATEAPATH
28

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Internal consumption
Data Augmentation
Bank as Producer of Data
Bank as a Producer of Products
Distributor of Insights
Distributor of Insights as a Platform
Platform Building
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29

30. 6 Elements of Open Banking Framework
Strengthen API
Governance
Build Open
APIs
Secure Data
and APIs
Create and Sustain
Partnerships
Connect Internal
and External
Processes
Create a Path to
Monetization
30

31. ANUJ AGRAWAL
IDC Financial Insights
anujagrawal@idc.com
Twitter: @ anujagrawal01