How will Open Banking really make an impact?
“Open Banking has many characteristics that will make a real difference in the corporate treasury arena. For example, in-built APIs (Application Programming Interfaces) allow for integrated access to the information and services provided by the platforms and ecosystems where corporate treasuries serve their customers and manage their supply chains. Also, organisations will be able to merge financial flows management more closely and transparently into their production and delivery business processes. This will enable them to pick and mix services more easily from banks and other providers to compose their own preferred solutions.
“This ‘Platform Banking’, in which banks and financial services companies are participating more and more, is where end customers manage their daily businesses, so this will allow corporations to get better and timelier financial services support.”
What role will technology play in the development of Open Banking potential?
“‘Platform Banking’, such as Open Banking, is all about APIs and smooth integration. Via APIs, it’s possible to blend offerings from a number of service providers and consolidate information into easily consumed packages for further delivery, or into analytical resources that can facilitate faster decision making.
“Merging various emerging technology tools via APIs is also possible, whether that’s blockchain and Distributed Ledger Technology platforms, data from Internet of Things devices, or docking into the services of Artificial Intelligence (AI) solutions. In essence, the use of new technology plays an essential role in transforming how corporate treasurers operate.”
When will we see real transformation thanks to Open Banking?
“Most of the European banks are currently focused on complying with the delivery of the second Payment Services Directive (PSD2), which is a good stepping stone towards further use cases of APIs in ‘Platform Banking’ and collaborative solutions.
“Some of the forerunning banks, including those from outside of Europe, have started to implement the new services available via APIs, but these have mostly been focused towards private and SME customers, with large corporation API services only starting to appear more recently.
“We can expect a shift in focus towards more innovative Open Banking services soon after the PSD2 deadline in September 2019. SEB is among other forerunning banks creating a set of large corporate APIs. These APIs will incorporate collaboration with other financial service providers and, of course, co-creation with the end customers to find out their real business needs.”
Will the traditional treasury software suppliers and banks need to up their game in order to deliver the relevant solutions, or will we see the rise of fintechs in the treasury space?
“Some treasury management system (TMS) and enterprise resource planner (ERP) vendors have started their expansion of financial services offerings into API-based integration with the supporting banks.
“At SEB, we have introduced an API offering aimed at commercial FX, available for all TMS and ERP providers to integrate easily to SEB’s FX offering. The first part of this offering is an informative currency rate listing for open payment transformation into common home currency for daily liquidity position analysis. There will definitely be new cloud-based solutions offering new capabilities to create even more complex solutions from components provided in collaboration with many vendors.
“API-based solutions will first of all complement and improve the existing file and batch based financial services use cases, but when the processes become more real-time, a new type of merger of financial services into business processes will be needed. This will require proactive and predictive analysis capabilities, and therefore new information will be needed to complement the current ways of working at the corporate treasuries. Banks need to be open to new methods of collaboration with other services providers and new market players to be able to best serve these corporate needs.”