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BIAN Applied to Open Banking - Thoughts on Architecture and Implementation
The document discusses the application of the Banking Industry Architecture Network (BIAN) to open banking, emphasizing secure access to financial information and the integration of services from multiple providers. It outlines a component model for banking activities that promotes operational reuse, mapping use cases to BIAN service domains and highlighting the importance of API management. Additionally, the document addresses security challenges and the role of regulations like PSD2 in governing access to customer data.
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BIAN Applied to Open Banking - Thoughts on Architecture and Implementation
- 1. IBM Global SolutionCenter, Dallas BIAN Applied to Open Banking Thoughts on Architecture and Implementation Biao Hao (biaohao@us.ibm.com) Executive Architect, IBM Global Solution Center, Dallas Guy Rackham Lead Architect, BIAN November 12, 2019 BIAN Open Day, New York
- 2. © 2019 IBMCorporation Topics • BIAN Applied to Open Banking • Thoughts on architecture and implementation - Use cases to BIAN mapping - Implementation – less-CORE to CORE-less • Summary Global Solution Center | Dallas211/15/19
- 3. Copyright BIAN 2017| Banking Industry Architecture Network BIAN Applied to Open Banking What is open banking? Many overlapping definitions Open Banking is the secure way to give providers access to your financial information q Customer controlled access to their financial information q Integrated services from multiple providers q Synergistic 3rd party service innovations… Re-working traditional banking services, in collaboration with other financial institutions and service providers q Payments and safe custody q Loans & deposits/investments q Financial advisory services and financial risk management All in the context of a life-time value proposition, perhaps with associations Open Banking is sharing banking data between unaffiliated parties to deliver enhanced capabilities to the marketplace Open APIs provide simple, low cost, scalable, and secure way to realize the benefits
- 4. Copyright BIAN 2017| Banking Industry Architecture Network BIAN Applied to Open Banking Instead of the conventional process view, BIAN defines service center components: Its a different model: business functional partitions – BIAN “Service Domains” Process models describe a series of linked actions… …usually assuming ‘shared’ data Shared Database BIAN isolates discrete business functions… …with a shared ‘vocabulary’ and encapsulated logic/data Internal Data Internal Data Internal Data Internal Data Internal DataShared Message Vocabulary BIAN defines a ‘component’ model of banking activity BIAN components can act as discrete business capabilities
- 5. Copyright BIAN 2017| Banking Industry Architecture Network BIAN Applied to Open Banking Stand-alone applications have a high level of operational redundancy… 80-90% is reusable – as little as 10-20% represents a unique functional ‘core’ The component design is specifically useful to support operational re-use: A Stand-alone Consumer Loans System Consumer Loans Transaction Processing CustomerInterface Service Configuration Operational Services Customer File Transaction LogMaster File Production Services Customer Reference Data Offer Processing Product Specification Accounting Customer Credit Rating Customer Preferences Customer Pointof Service Document Services Consumer Loan Fulfillment Transactions A Consumer Property Insurance System Consumer Insurance Transaction Processing CustomerInterface Service Configuration Operational Services Customer File Transaction LogMaster File Production Services Customer Reference Data Offer Processing Product Specification Accounting Customer Credit Rating Customer Preferences Customer Pointof Service Document Services Insurance Policy Transactions Claims Processing Components built for the first system could be reused in the second BIAN defines a ‘component’ model of banking activity Service APIs help realize operational re-use
- 6. Copyright BIAN 2017| Banking Industry Architecture Network BIAN Applied to Open Banking The opportunity for open banking solutions varies for the different business areas: The BIAN Service Landscape V8.0 BIAN Value Chain Service Landscape shows different considerations BIAN has specified a rich collection of service center designs
- 7. Copyright BIAN 2017| Banking Industry Architecture Network BIAN Applied to Open Banking Customer First, define the scope of APIs – A2A, B2B and B2C The terms define the scope, and have distinct operational implications… CustomersOperations Finance & Risk Management Channels Resource Management Business Direction Products Business Development 3rd Party Provider A2A B2C B2B B2B2C A2A traffic is under internal control, all else is not... BIAN Value Chain Service Landscape shows different considerations
- 8. Copyright BIAN 2017| Banking Industry Architecture Network BIAN Applied to Open Banking The focus for today is on the delivery factory at the core of the model… CustomersOperations Finance & Risk Management Channels Resource Management Business Direction Products Business Development BIAN Value Chain Service Landscape shows different considerations The component view of open banking varies by business area
- 9. Copyright BIAN 2017| Banking Industry Architecture Network BIAN Applied to Open Banking And within that, Channels and Customer business areas in particular… CustomersOperations Finance & Risk Management Channels Resource Management Business Direction Products Business Development Governing Access – Both at the Contact & Servicing Mandate/Relationship Levels Integrating Customer Insights & Preferences Synergistic Product/Service Combinations? Cross-product Operations… A role for DL technology? BIAN Value Chain Service Landscape shows different considerations BIAN solutions for Customers & Channels business areas…
- 10. Copyright BIAN 2017| Banking Industry Architecture Network BIAN Applied to Open Banking 3rd Party Provider Fixing the security issues with screen scraping with only a partial solution Finance & Risk Management Resource Management Business Direction Business Development CustomersOperations ChannelsProducts CustomerCustomersOperations Finance & Risk Management Channels Resource Management Business Direction Products Business Development 3rd Party Provider Current Account Position Keeping Corresp- ondence Customer CustomersOperations Finance & Risk Management Channels Resource Management Business Direction Products Business Development Current Account Position Keeping Party Authentic ation SCA With ‘screen scraping’ the customer provided their bank log-in credentials to the 3rd party to extract statements and ’scrape’ the data… PSD2 introduced SCA, 2FA, OAuth 2.0 and some other techniques and technologies to protect the customer’s credentials. But access controls are limited PSD2 – A case study in governing access (or not) PSD2 has mostly implemented SCA in a narrow context
- 11. Copyright BIAN 2017| Banking Industry Architecture Network BIAN Applied to Open Banking Current Account Basic authentication and service mandate handling build in the API gateway may not scale API Gateway Authentication Service (Customer & TPP) Resource Access Service (Customer & TPP) Type 1 Type 3 Channels Servicing Order Customer Workbench E-Branch Operations Contact HandlerExecute Initiate Execute The BIAN wireframe is a blueprint for incremental development Bank’s building a Type 1 interface could be locking out future enhancements
- 12. Copyright BIAN 2017| Banking Industry Architecture Network BIAN Applied to Open Banking A wide range of capabilities are integrated to govern external access… Customer Workbench E-Branch Operations Contact Handler Point of Service Customer Prod/Svs Eligibility Contact Routing Execute Provide Initiate Initiate Record Party Authenti- cation Issued Device Admin. Issued Device Tracking Evaluate Retrieve Retrieve Retrieve Channel Activity History Customer Event History Servicing Event History Channel Activity Analysis Customer Behavior Models Retrieve CaptureCapture Retrieve Contact Dialogue Current Account Transaction Authori- zation Execute Initiate Execute Capture Servicing Order Servicing Mandate Broker Agreement Customer Agreement Fraud Evaluation Fraud Diagnosis Fraud Resolution Fraud Insights Fraud Models Initiate Request Request Retrievet Evaluate Initiate Initiate Initiate Retrieve Retrieve Retrieve Capture Capture Capture Customer Reference Data Mgmt Customer Access Entitlement Retrieve Retrieve Customer Profile Retrieve Key real-time “orchestrators” for the contact Channels The full model is a quite complicated…
- 13. Copyright BIAN 2017| Banking Industry Architecture Network BIAN Applied to Open Banking Reward Points Investment Portfolio Management Custody Admin. Financial Advisory Services Customer Profile Customer Access Entitlement Party Life- cycle Management Party Data ManagementCollateral Asset Admin. Broker Agreement Customer Reference Data Mgmt. Customer Position Customer History Customer Behavior Models Collateral Allocation Management Customer Credit Rating Customer Insights Finance & Risk Management Resource Management Business Direction Business Development CustomersOperations ChannelsProducts The range of customer insights and preferences present multiple opportunities for open banking Consolidated financial position q Cash flows q Collateral q Credit Historical analysis Servicing Mandate Customer Agreement Customer Relationship Management Customer Prod/Service Eligibility Life-time relationship development history and plan Product/service usage – current and desired Bank and 3rd Party contracts and mandates Relationship history and maintained/ developed insights Customer holdings Customer business area Considering how customer information might be leveraged… PSD2 has mostly implemented SCA in a narrow context
- 14. Copyright BIAN 2017| Banking Industry Architecture Network BIAN Applied to Open Banking Finance & Risk Management Resource Management Business Direction Business Development CustomersOperations ChannelsProducts The Banking Relations Working Group will be building out the wireframe and developing a wide range of scenarios that explore the potential… Customer business area Solutions are only now starting to evolve, the potential is however significant
- 15. © 2019 IBMCorporation Operations Products API APICustomers Channels Value chain decoupling and integration – meeting regulation requirements and creating new business models Operations Products API 3rd Party Bank APICustomers Channels
- 16. © 2019 IBMCorporation Open Banking reference architecture 16 Channels & Partners Distribution Channels + Customers API Production Products + Operations API Channels Customers Products Operations Open Banking • API Management • Access Level Security • Consent Management • 3rd Party Management • Business Control • More…
- 17. © 2019 IBMCorporation Account Information – read only API that orchestrates data from multiple service domains 17 Current Account Savings Account Credit / Charge Card Loan Customer Product / Service Eligibility Customer Reference Data Mgmt Account Information SOR Deposit SOR Customer SOR Loan SOR Credit Card Position Keeping 1. Retrieve existing products/services 2. Retrieve customer name and address 3. Retrieve Current Account 4. Retrieve Credit / Charge Card 3.1. Retrieve TXs for Current Account 4.1. Retrieve TXs for Credit / Charge Card Will this perform? Account Information Service • Orchestrate multiple services • Transform to target messages • Expose target endpoints BIAN Based Business Services • Type 1: wrapped host • Type 2: integration with ESB • Type 3: microservices Systems of Record API Distribution Channels Customers Production Products Operations API
- 18. © 2019 IBMCorporation Account Aggregation – realizing value of Open Banking with better customer insights 18 Customer Behavior Models Customer Behavioral Insights Customer Position Customer Offer Account Aggregation Customer Product / Service Eligibility Retrieve customer position Account Aggregation Service & API • Customer position aggregated from multiple financial institutions • Used by channel applications BIAN Based Business Services • Customer Position maintains … • Customer insights from analytical models • Offers to customer Account Access to other banks • Account Access to multiple banks • Using FinTech offering to simply the integration Account Access Bank N Account Access Bank 1 Account Access Bank 2 Account Aggregation Service by FinTech Customer Position Consent API Distribution Channels Customers Production Products Operations API
- 19. © 2019 IBMCorporation BIAN service domain based microservices & APIs 19 Microservices Models BIAN SDs + Physical Generate & annotate Container Environment (Kubernetes) Service Models Microservices Code First (A2A) API Application Models BIAN SDs + Messages 4a Swagger Models API Developer Portal Generate & publish APIs API Specification First (B2B/B2C & A2A) BIAN Service Domains UML Models for BIAN Service Domains UML Models for Conceptual (BOM) (IM/ISO/RYO) Industry Models ISO 20022 Roll Your Own 1 2 UML Models for Messages UML Models for Physical Models 3a 5a 3b 4b 5b Control Record Behavior Qualifier Behavior Qualifier Behavior Qualifier Sub Qualifier Sub Qualifier Sub Qualifier
- 20. © 2019 IBMCorporation Implementation pattern – command query responsibility segregation (CQRS) Two types of operations 1. Design of a BIAN service domain - Design of service operations with input and output messages based on common models (BIAN BOM, ISO20022, IFW, Roll Your Own) - Mapping to API endpoints and generate Swagger files 2. Build of a service operation of COMMAND type - Business logic (workflows/rules) with invocation of SOR services - Message transformation from message model based on common models to SOR specific message format - Invoking the SOR services - Generating events on updating to SOR 3. Design and build of Local Data Store - Data model/schema based on common models 4. Build of a service operation of QUERY type - Query of the underlying Local Data Store - Mappings from data model to message model that are based on common models 20 COMMAND Service Operations Event Consumer QUERY Service Operations Event Consumer System of Records Local Data Store Event BIAN Service Domain
- 21. © 2019 IBMCorporation Account Information with CQRS pattern – less-CORE to CORE-less is a journey, likely a long one 21 Current Account Savings Account Credit / Charge Card Customer Product / Service Eligibility Customer Reference Data Mgmt Account Information SOR Deposit SOR Customer SOR Credit Card Position Keeping BIAN Based Business Services • QUERY operations read from local DBs and return • COMMAND operations publish events • Local DBs subscribe to COMMAND events and apply updates • Further optimization possible Systems of Record • Subscribe to COMMAND events and apply updates Customers Event COMMAND QUERY COMMAND Accounts Event Transactions Credit Cards Event Account Access Service & API API Distribution Channels Customers Production Products Operations API
- 22. © 2019 IBMCorporation Summary • BIAN applied to Open Banking, focusing on Channels, Customers, and Products areas in BIAN service landscape value chain • Example use cases mapped to BIAN service domains • Thoughts on architecture and implementation • Questions? Comments? Global Solution Center | Dallas22