NTB’s Open API to disrupt the financial services industry
The future of banking as a whole is in for some serious disruption and it will be challenging to stay as a key player in the financial services sector if you don’t go digital, a top official in the banking sector emphasised.
Nations Trust Bank (NTB) for the first time in Sri Lanka launched the Open Application Programming Interface (API) banking platform. NTB’s customers can integrate the bank’s services directly into their own systems and workflows with the Open API. It’s a set of clearly defined rules of communication that allows customer’s systems to efficiently communicate with the bank’s systems securely.
At a media briefing held at the bank’s’ head office in Colombo last Tuesday, NTB Director and CEO, Renuka Fernando said, “If we are to stay relevant as a key player in the financial services industry, it is imperative that we go digital. Our assessment of the future of banking indicates that the sector as a whole is in for some serious disruption. The disruption will not come from who we consider as competitors but from those who are not even banks.” If you look at the retail transactional traffic, about 50 per cent is on digital channels, she added.
Ms. Fernando elaborated that the historical attitude and behaviour of banks was more like a fortress, very closed mainly because of security, secrecy laws and confidentiality. Banks traditionally do not share information or give access to their systems and are very shy to collaborate with partners. But the trends in the future of banking will be one of safe public spaces, openness and inclusivity. “We will have no choice but to collaborate with it if we are to stay relevant,” she noted.
Nations Open API platform will allow third party systems to directly interact which will lend itself to creating a framework for collaborative innovations and progress. The potential for open banking is unlimited. It can be used by start-ups, large corporates, small and medium size enterprises, independent application developers and even tech savvy individuals in their own businesses providing third party solutions. Typical use case scenarios include online purchases, fund transfers,Enterprise Resource Planning (ERP) integration, cash flow management and white label services, Ms. Fernando explained.
As more banks begin to open up their systems through Open API banking, the real potential of this mechanism will be unleashed. Customer credit worthiness for lending will be easily assessable as the information will be available and customers will be able to secure the best rates and terms. Managing money across accounts at different banks will also be possible through a single access point of the customer’s choice in the future and the customer will be able to decide whether or not to share their information.