Moving towards a new era, API is the “soul” of open banking

Sharing at the conference “Open Banking/Open Banking 2023: Transforming business models from closed to open” on the afternoon of December 7, 2023 organized by Vietnam Economic Magazine/VnEconomy in collaboration with the Department of Information Technology, Co-hosted by the Payment Department and Vietnam National Payment Joint Stock Company (Napas) under the State Bank, Mr. Nguyen Chien Thang, Director of BIDV Digital Banking Center, reviewed the digital banking eras along the way. development road.

Accordingly, when the internet was born, it was the era of internet banking. Next is the mobile banking era starting in 2007 when the first iPhone appeared in the world. The omni chanel era continues when transaction channels with customers and customer touch points are unified and seamless, creating a seamless experience.

“Currently we are in the open banking era, the latest trend in the banking and finance sector today,” Mr. Thang emphasized.

“Recently, banking services have become “invisible” to customers, this is a very good concept but behind it contains a huge amount of technology to meet the strategies.”

Director of BIDV Digital Banking Center.

However, the concepts and types of technology related to open banking are very complex. Therefore, the most important thing now is that this concept and model is spread and unified throughout the bank’s leadership team to all implementers, so that we have a common language, towards our goals. The general goal is to develop a successful open banking model at the bank.

With more than 20 years of experience working in the banking and finance sector, Director of BIDV Digital Banking Development Center expressed his overwhelm at the speed of technological development in the banking sector in recent years. Banking services are also becoming more interesting, increasing customer experience.

Also according to Mr. Thang, banking services are also becoming more and more interesting as the banking platform is now integrated with the digital ecosystem with hundreds of products and services linked to third partners, thereby bringing benefits. Maximum benefits and increased user experience.

“However, customers do not feel that behind it is the bank providing the service,” BIDV leaders shared.

The speakers exchanged highlights at the discussion session.  Photo: Trí  Dung.
The speakers discussed enthusiastically at the discussion session. Photo: Tri Dung.

To achieve the above results, the soul is API (Application Programming Interface) technology, connecting ecosystems with each other, between banks and third parties and vice versa. Thanks to that, customers can use a variety of banking services.

The bank itself consumes APIs of 3rd partners and vice versa, banking services are “embedded” in the journeys, in the community of 3rd partners. At that time, the bank is “keying” its services through API for customers to use.

APIs can even become an API economy, standardized and widely shared to become open API standards. When open API is strongly applied in the banking sector and forms an open banking model.

BIDV leaders also expressed their joy when bank staff brought banking profiles (portfolios) to introduce to businesses and third parties, in addition to traditional products such as loans, deposits or other products. other products, there is a newly added product line called API.

“API is not simply a language or tool for programmers, but a product that can be shared, sold and create a new business model,” Mr. Thang highlighted.

Grasping this trend, BIDV and IBM Vietnam research, build and develop the BIDV open API system, an ecosystem leading the open banking trend of the future, with the hope of continuing to expand. and spread the digital ecosystem on new platforms, stay ahead of market trends and shape future financial services.

Previously, when open API was not strongly developed, banking services were only performed on platforms and applications owned by banks. However, with the advent of open API, all banking services will be widely shared on the platform of any partner connected to the bank, at any touch point or context in which it develops. generate financial needs of users.

According to information from the conference, the model of banks and third parties connecting through a central platform (Open API Common Platform) is currently being deployed in regions around the world such as Europe: NexyGenPSD2 of The Berlin Group, Open Bank Project of French software company TESOBE, STET; In Japan, there is NTT Data’s Open Canvas; in Korea, Common Open Platform for Banks in Korea; Similar projects of banks: MayBank, DBS, BNP Paribas…

However, in Vietnam, the open banking or open API model in Vietnam is still individual, largely built by banks and partners based on each other’s needs and there are no common standards. Therefore, the cost of building information technology infrastructure in financial services is quite large.

Therefore, according to a quick survey at the conference, over 95% of guests agreed that it is necessary to form an API hub to fill the gap and connect directly between banks and third parties, helping to facilitate partnerships. between the two sides becomes simpler, minimizing resources.

Sharing from the perspective of an expert with 25 years of experience consulting for financial institutions, Mr. Akira Yamagami, Consulting Expert of NTT Data Japan Company, said that the important thing is the future of open banking. , organizational structure to realize this… instead of rushing to find a solution, choose the means, API technology or API hub model.

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