Lessons learned from Standard Chartered’s open banking journey

Martijn De Jong, Managing Director at Standard Chartered, paints an in-depth picture of the bank’s plans to build stronger customer engagement through Open Banking

Can you share with us some of the key points in the bank’s recent history with Open Banking that led it where it is now?

Through constant engagement with regulators, client segments, and fintechs, we gathered four key Open Banking themes:

  • Increasing demands from customers – Clients want faster and more flexible access to services and data. APIs enable us to provide clients with such a service via self-help model;

  • Technological disruption - Fintechs and the technology they are deploying are changing the way clients interact with financial service providers and we want to be part of this change;

  • Rise of subscription-based services – Flexibility and short-termism are becoming the new norm. APIs can provide our clients with the flexibility to choose appropriate data;

  • Technology advancements - Cloud-systems and related technology have come a long way in a short time. We are now able to offer our clients technology that wasn’t available before, thus enhancing their efficiency.

Within Standard Chartered recent history with Open Banking, Standard Chartered managed to achieve the below:

  • Standard Chartered is active in API Collections for a leading airline in Malaysia from their ticketing agents. Using API and Virtual Account, Standard Chartered was able to assist the airlines in achieving higher efficiency by eliminating manual processes and improve reconciliation from two days to almost in real time;

  • Standard Chartered is one of the pioneers in offering faster payments via API in Singapore and India. Our corporate clients use API services to initiate real-time payments and also to get real-time debit/credit notifications. This helps our clients with improved liquidity and working capital management;

  • Standard Chartered announced in March 2019 that it will be launching an open platform for Small and Medium Enterprises (SMEs) in India, to help them grow by providing access to a range of financial and business solutions. This is one of the business ventures being launched under SC Ventures, the innovation, investment, and ventures unit of Standard Chartered. The technology platform will offer SMEs access to financial and business solutions through a network of partnerships. This technology platform will be one of the first to provide holistic solutions to SMEs in India. It will leverage the rapidly evolving ecosystem of data sources and integrate with digital business solution providers. These solutions will include access to business loans, invoice/supply chain financing, logistics, commercial insurance, and skilled resources, among others. The platform will provide a data-driven ‘digital only’ experience to SMEs, supported by artificial intelligence and machine learning.

What were the biggest achievements so far of the Open Banking API Portal created by Standard Chartered and what are the biggest lessons you’ve learned in the eve of PSD2?

Standard Chartered has been driving innovation in the banking space, co-creating solutions to improve client experience, and establishing new partnerships and solutions to change how we approach and think about banking. The introduction of aXess created a vibrant exchange and engagement both with external tech community and internal SCB population.
To date, aXess external portal has achieved the following:

  • published phase 1 of the HKMA APIs in January 2019;

  • published PSD2 APIs (for Europe);

  • published South Korea’s offerings of Open Banking APIs (and providing Korean Language support) in June 2019;

  • over 100 APIs listed on external portal;

  • over 10,000 new visitors in 2019;

  • 16 community articles have been published;

  • 12+ business leads. These leads are external parties approaching us, who want to work with us in order to co-create better products and services.

aXess internal portal has been established as the community and a marketplace for individuals to explore solutions built in the bank. Staff within our bank can:

  • find and access development tools and resources, such as our internal APIs, reusable components and libraries (like SCARF);

  • access a directory of our in-house built tools (like mobile and web apps);

  • have an overview of technology standard with the catalogue of Buy/Sell/Hold technology software and hardware.

There is active development of internal APIs, e.g. ‘getholdings’ API built for Custody, which is also going to be externalised, thus making it the first end-to-end API for both internal and external. Our clients inadvertently have helped us to prioritise what APIs we have developed, e.g. an airline (business side not the technology side) who asked if we could develop real-time credit and debit notification APIs; once we developed it and discussed with other clients, we discovered that it is actually one of the most popular APIs among our customer base.

From 14 June 2019, Standard Chartered Bank PSD2 API is available for live data testing, enabling TPPs to test your production API with live client’s data. What is aXess, what kind of standard does it abide by and how has it performed so far in terms of providing Strong Customer Authentication and Common and Secure Communication?

Standard Chartered Bank launched its PSD2 API sandbox in March 2019. The PSD2 regulation seeks to open up competition in the EU to Banks and payment providers by allowing licenced third parties (TPs) access to bank accounts through APIs. Standard Chartered API sandbox is available for licensed third parties to test their Account Information Service providers (AISP) and Payment Initiation Service Provider (PISP) services, either in readiness for providing services to our clients or through a co-created approach directly with our clients. Standard Chartered invited TPs that may be considering providing AISP/PISP services to Corporates in the Region, thus requiring access to the accounts we provide in London and Germany, to contact us to arrange sandbox testing.

The PSD2 APIs are live in Standard Chartered aXess website. aXess drives innovation and technology culture through openness to co-create better client products and services working in partnership with corporates, fintechs, and other developers to encourage the co-creation of better client products and services through the sharing of APIs. aXess drives the development of an open community for the bank’s developers to refine and innovate through emerging technologies.

The aXess platform will offer developers open access to the bank’s open source code for banking products and its APIs, applications, and libraries. It serves as an adaptive layer in its technology architecture.

The APIs standards to abide by depends on the market and the ‘scheme’ – e.g. the UK is leading with Open API, which has a good versioning strategy (REST-based). Standard Chartered is following this, but it is limited to PSD2 scope (cash). For trade and custody, Standard Chartered uses the UK’s Open API standard as a basis and defines it internally. India’s UPI payments system is based on XML. There are no centralised standards bodies, but there are organisations such as TradeIX that are establishing trade API standards. Regulators are also coming in, but it is still early, so we cannot talk of a dominant standard in this geography yet.

This article was also published in The Paypers.

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