Open Banking API For Dummies
Have you ever heard about Open Banking API concept? And what exactly is it. If you’re a banker, I mean old-school one and haven’t heard about this concept, do not close browser, this story will light you and award ton of knowledge that boost your career immediately.
By 1999, banking transaction is something weird and exclusive service to Elite class in Vietnam. Everyone proclaimed bank service is only for billionaire as a luxury service such as Vault — SafeBox, International Transaction, Business Transaction, Cheque and few more stuffs. But nowadays, bank service are more popular and approaches every single one of Vietnamese as normal demands, thanks to bills of Vietnam State Bank for years ago to made important decision that transfer compensation, money to employee’s bank account. Not only bank service, e-wallet and fintech (financial technology corporation) service are attacking every aspect of life: payment either by card or tap smartphone to POS to make transaction automatically; transfer money to individual is never simple than earlier, few tap on mobile device and money comes; consumer finance would be hassle-free, any demands for new electronics consuming device would be offered to any one by next-gen technology, and input are your face and identity card.
Back to mid 2018, I was an adviser to a startup bases in Helsinki, Finland and their slogan is: Everyone is a banker (of yours). Can guess what services they offer? Cost sharing, bill splitting and repay request, last but not least, their app UX is perfect, friendly, pre-launching campaign acquires over 10k users that number awaked Nordea bank to ask to cooporate together. More startups like them are threatening Financial Intuition allies, bank’s no longer dominate and control payment section any more, a huge advantage now are taking away from them by startups with creativity out-of-box ideas. The more simpler, easier, customer-eccentric approach and faster online service those startup offers service, the more traction claims by society, and there’s a prediction for the end of financial monopoly. Enabling transaction, payment is much easier than before (of course cashless and wireless way). Everyday getting in my car, I stop asking myself whether I foget anything before start engine, even sometimes left my pocket in the key-bowll on shoes shelves without nerves. Smart phone has replaced partially my pocket with cash and cars and thanks to API, every banking service now is distributed by smart devices with cloud service. Acknowledge those threats, Financial Intuitions are no longer greedy about charging more and more from consumer, but asking more and more Fintech startup to join them to succeed together.
Thanks to fast-growing cellular network, internet connection and mobility transformation. API was facilitated very well to boost the next wave of Financial Service evolution to approach every aspect of the World from slumdog neighborhood in India to luxury condominium in Singapore. By API payment transaction is made by a tap, t
hat would be a insurance claim (tap), border-less payment (tap), bill pay (jeez forget about those). By 2016, PSD 2 — a concrete EU directive has establish the 1st Open Banking concept and spread every bank in EU. Well said, so what does API mean to you, my traditional Banker?
API stands for Application Programming Interface, a communication protocol was invented along with World Wide Web – WWW. For short, to chitchat to my family in Munich, I usually dial +00 49 XX XXX XXX. As same as API does, but digitalised every steps, you don’t pick up the phone as 1st step, dial “00” for International call, “49” is Germany country code, the rest is phone number of receiver; it must be dialed accurately unless you gonna call someone else and hear: Wrong phone number! API as mentioned earlier is a communication protocol and it’s specialised for concrete function with result. Making Payment API would take amount of payment, receiver and source (money) as well known Parameter to process and give you Result either Success! or Failure. To consume (to use) a API, all what you need is just a smart phone, a grandpa computer with good internet connection would do fine. For short, coming along Open Banking API is the bear of Digital Bank, the waves of many new Financial Intuition without physical branch, even head quarter. Teller is replaced by Chatbot — AI powered, Stand Order is digitalised right on your mobile device, even credit card is produced virtually on your mobile device too (because of smart phone is used as a way for wireless payment, haven’t heard about Near Field Communication — NFC Payment?). Jeeez! Guess what, employee who does manual work would be replaced, soon but not now and to be conscious about this consequence is important to any traditional banker. And I’m so sorry for this, cuz I’m the one transformer who’s supporting those transformations and it’s rapidly change the way people do transaction in any countries.
Moving along with API is digital transformation and human brain. A new way to communicate, hmm it’s not new to engineering world but new to traditional banker, f*cking new! Many products have born, and thanks for innovative mindset of banker (who make crucial decision after hours to digest how important the digital transformation wave is), it could be a Helsinki based startup which enable Bill Splitting use Open Banking to share cost between each others, mobile wallet to use Open Banking to offer exclusive product to either their customer base or bank by Transaction History, border-less transfer is nearer to expat and many more that would surprise you how does API impact to banking business and backbone of any new product is API infrastructure. Well, years ago asking a Bank to collaborate with startup is needle in haystack, how arrogant Banker is! But the new wave of digital transformation has declared the battle of Bank with their opponents, not Fintech startup but their downturn. Any one know any one does Bank process within days? Of course, no one the old man is always move slowly than youthful teenager that depicts the picture of Fintech startup and Bank. But they both keeps themself exclusive advantages and the equilibrium somehow brings them closer to collaborate to share value to common customer base and stay together they’re much stronger!
Well said, I’m now working at Orient Commercial Bank — OCB Bank Vietnam, taking responsibility to lead the wave of digital banking and transformation. I love to work with any startup, contact me to grow stronger and share advantages.
