Open the vault! The platformization era. 

We have entered an era of platforms and marketplaces. Such as all other markets, financial services will embrace this revolution and take advantage of it to evolve their business model. The emergence of Banking-as-a-Platform and Core Banking Platform shows the development that the banking industry is undergoing. Banks need quickly to start thinking about it because this new era has begun and will become stronger over time. 🚀

The platformization era 

It is a global perception. There are fewer and fewer physical branches, but everyone needs banking services, especially digital banking services because today, more than 70% of banking interactions in Europe and the United States are mobile or digital.

In the digital age, consumers' expectations are higher and must match their lifestyle. New banking services are evolving to bring more added value, reduce friction, get a real-time activity, and a consistent customer experience across channels. Yet many banks are struggling to do so because of their legacy systems and product-oriented culture. Open Banking requires doing banking differently, empowering customers - when, where, and how they want it. If your bank doesn't give customers what they want, open banking and tech players will do it for them.

Platforms foster innovation and personalization 💡

The emergence of platforms is just a chain reaction to market forces, allowing banks to integrate services and applications through technology providers to create unique and personalized offers and customer experiences. 

These platforms may also integrate new technologies such as artificial intelligence, machine learning, or data analytics to help banks better understand customers and implement marketing actions to build customer loyalty. 

The technologies integrated into these platforms are proving to be very effective in facilitation processing, increasing efficiency, promoting innovation, and, above all, improving customer relations; the tangible benefits are access to new development, testing, real-time, flexibility, and resiliency capabilities. 

A change already in move

Open Banking is progressing at a dizzying speed. Banks must therefore participate in the financial and technological ecosystems to continue to create added value. Where should banks position themselves to prepare for a very dynamic future?

Take the right steps to succeed in a fast-changing financial world ⚡️

While some banking products are becoming mainstream, human interaction and customer experience remain the main differentiating factors. The digital banks that will survive are those that have put the customers at the center of their concerns while trying to increase their commitment and loyalty. 

To succeed, banks must: 

• Define the processing on the Core platform, i.e. opening up the Core Banking System so it is scalable and equipped with APIs to facilitate integrations and faster development of new features. 
• Converge the bank’s culture and mindset with the precepts of Open Banking: openness, agility, and real-time. 
• Release new products and services simultaneously across multiple channels (omnichannel). 
• Set up a microservices architecture to facilitate the release of new features and make regular component updates.

Build APIs off-the-shelf

Participants in the financial ecosystem now have the connectivity tool (APIs) to connect and share added value. In the Open Banking world, APIs off-the-shelf enable to define the competitiveness level of a bank and can be made up of APIs from existing marketplaces. New Banking-as-a-Platforms and Core Banking Platforms make it possible to orchestrate these APIs off-the-shelf in an orderly manner and in real-time. 

The power of APIs, harnessed by banks, offers the possibility to build new, more intuitive, and relevant experiences. To date, PSD2-related APIs include account authentication, payment initiation, customer data sharing (Open Data), and account aggregation services for the retail banking segment. We can also mention a few examples for the BtoB side, real-time cash management, better use of the working capital requirements, more accurate forecasts, and decision-making support. We are only at the beginning of the API revolution, and new opportunities are far beyond your imagination. 

Open your vault! 🔓

The IT infrastructures of traditional banks were designed in the 70s with a vault spirit, and this approach does not meet the requirements of Open Banking and open data concepts. More and more value-added banking products are now combined with TPP technologies or features. With their legacy "IT", banks can not compete in such an environment if they do not decide to evolve. While adopting a Core Banking Platform, retail banks will become agile players, deliver digital banking services, innovate new offers, and cater to all customer expectations. 

Recreate the banking value chain

The APIs universal adoption will allow the banking value chain to be reconstructed by individual components, each of which can be marketed. It is a new environment for banks, but GAFA and BigTech have long since embraced this technology to create and generate income. For instance, the Google Maps API is one of the most widely used APIs in the world, and has a significant business impact. Uber uses this API to give you the geolocation of your driver. 

New technologies will facilitate the gradual modernization of banks' IT infrastructure. Retail banks will evolve to Banking-as-a-Platform or a Core Banking Platform strategy to create a back-end system responding to their positioning and to customer needs. The digital age is a real transformation opportunity for banks.