Adapting to changing times with open banking

An Open Banking platform is built using new digital technologies of microservices, APIs and cloud to provide a platform that enables banks to add new application services quickly, easily and securely.

According to Choo Soo Ching, Group Managing Director of Silverlake Digital Economy, the ‘open’ connectivity further facilitates the building of business ecosystems through collaboration and partnerships with external parties to provide new business propositions for customers.

“Banks have previously built or acquired banking applications designed to meet the needs of specific internal departments, customer segments, products and channels.

These have been difficult and expensive to maintain as technology and customer expectations have changed,” she says.

Choo further points that in contrast, an Open Banking platform is designed for an increasingly changing world where speed to market demands a better technology base than banks’ traditional technology architectures.

Silverlake’s MÖBIUS Open Banking Platform hopes to achieve the same. Designed to provide a set of microservice-based applications out-of-the-box for consumer and corporate banking services together with open connectivity, the platform enables easy integration of existing and partner services through Open APIs.

“The platform is based on the successful MÖBIUS digital banking platform and the Silverlake core banking system which is deployed by most of the conventional and Islamic banks in Malaysia.” Choo highlights.

Fitting in with the new normal

The managing director says the ‘new normal’ has yet to be defined and its timing is uncertain. “We view the pandemic as an additional driver for change in the banking industry, accelerating trends that were already detectable.”

These trends according to Silverlake, include the growth in mobile phone transacting, on-boarding of customers over the phone rather having to go to a branch and the simplification of products for customers among others.

“This will be an unsettling period for incumbent banks and they will need to use their expertise and financial strength to find new business and operating models, which will be underpinned by the use of open technology platforms,” says Choo.

Challenges within the industry

The managing director says traditionally banks have acquired software to address specific business problems. Over time, this has created a patchwork of technology support for customer servicing which has led to well-documented industry service failures and customer dissatisfaction.

“These are the challenges within the banking industry. The overall commercial eco-system is also split along traditional industry boundaries and the move to digital is changing these boundaries and is demanding more and more interoperability between industries,” she tells BusinessToday.

Choo further adds that payments has been the first area of attention to create technology-based standards that provide ‘open’ access and so address the cost and speed of payments in-country and across countries.

“The MÖBIUS Open Banking Platform re-imagines banking services so that individual banks can revamp their operating model for a digital world, cognizant of the need not just to operate within tradition institutional boundaries but as part of an increasingly ‘open’ commercial environment that delivers ‘better, faster, cheaper’ services to customers,” says Choo.

Benefiting corporates and consumers

The pandemic has accelerated the process of working digitally from home and buying through e-commerce. This has placed business models in a constant state of flux for the coming years.

The change thus demands flexibility and the ability to change quickly in every industry, including banking.

“Banks who are dependent on legacy systems will not be as flexible as those banks who have embraced ‘open’ platforms and technologies,” says Choo.

She highlights that in the digital world in which banks operate is not just about providing traditional banking products.

“It is about new payment partnerships with e-wallet providers and new partnerships with other industries such as insurance and property services to create new services for a digital world,” she says.

The next release of the MÖBIUS Open Banking Platform will include credit cards and instalment loans, and a personalisation engine that provides information, service options and advice for each customer. 

Future releases will build out cash management and trade finance functions for corporate customers.  All of these releases will use the same cloud-native architecture and platform design to enable banks to pick and choose the services they want to use.

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