The IBM portfolio includes a broad range of technologies that underpin the backbone of the financial system. These technologies are at the base of the Second Payment Services Directive (PSD2) APIs exposed by many banks across Europe.
PSD2 is aimed at lowering financial transaction costs and promoting innovation. It forces banks to ‘open up’ their systems, enabling third parties (TPP) to retrieve account information and initiate payments on behalf of the end customer. Even though the PSD2 regulation applies only to Europe, open banking technologies are being embraced across the globe and are widely expected to transform the way in which we pay for goods and manage our finances.
Many IBM customers are ready to move beyond compliance and exploit the new ecosystem that’s promoted by the regulators.
As part of IBM’s commitment to enable innovation, which is built on the foundation of secure and scalable platforms, IBM is continually engaging with startups, technologists and innovators to explore the ‘art of the possible’ for open banking.
For the majority of consumers, online banking can become a critical tool to manage accounts conveniently and efficiently. Yet, consumers need reassurance that their data is secure, especially when sharing them with third parties through APIs.
IBM recognises that to retain existing customers and attract new ones, financial organisations must continue to evolve their online services. Key to this is putting customer experience and trust centre stage by offering practical, real-world solutions.
For our use case, we looked at a mother who wanted to support her daughter while travelling and studying abroad, so that her daughter could make the most of the experience, without having to worry about being overdrawn. When her daughter’s account falls below a certain amount, she would like to know so she can top up her daughter’s bank account. Ensuring that her daughter has sufficient funds gives her peace of mind.
Consent management is one of the core aspects of the open banking ecosystem. The complexity increases when consent is required to transfer an amount between two bank accounts which is triggered by the behaviour of one of the accounts. The challenge was to develop an app that implemented this complex scenario swiftly, securely with an engaging customer experience.
“With NearForm, we found a partner who could help us explore ‘the art of the possible’. They understood straight away what we were trying to do” explains Carlo Marcoli (IBM – API Economy Solutions Leader – Europe).