The present and future of 'open banking': the movement that reinvented banking and its relationship with companies
In 2015, the European Parliament passed the new digital payment services directive, more commonly known as PSD2. The directive laid the groundwork for the emergence of the open banking concept: a solution to allow contextualized access to banking services, wherever and whenever needed. The regulatory framework set forth by PSD2 has driven a true transformation of the financial sector itself and changed how financial services are viewed.
When PSD2 was approved in 2015, BBVA was already working on its own internal transformation process to build closer ties with the innovation ecosystem and explore new business models. The bank’s goal was always clear: to deliver the best digital experiences, supporting and driving the digital transformation of both businesses and the company itself.
‘Open banking’ is the perfect scenario and APIs the perfect technological lever to meet this goal. APIs are bridges, in the literal and metaphorical sense. On the one hand, they provide an interface that allows two computer systems – such as a company’s ERP system and BBVA’s systems – to interact. But they also create, as a result of this interaction, the a collaborative ecosystem that allows anticipating customers and clients’ needs to come up with more efficient services and embed them on the same platforms they already use. In short, it allows putting banking services exactly wherever they need to be.
The advantages of ‘open banking’ for companies
Besides the creation of ecosystems and co-creation of solutions with digital platforms, the use of APIs also allows companies and businesses to better manage their operations. BBVA offers a number of solutions tailored to fit different business’ needs: from creating collaborative digital ecosystems with embedded BBVA services in their own platform (ERP), to maximizing the value they extract from their data and the customer information they handle, to deliver more personalized user experiences and new products adapted to their users’ day-to-day reality.
Any company, considered as a platform built around an API, can multiply its ability to attract customers and therefore create value: connecting business ecosystems inside and outside the organization itself that, in turn, facilitate the creation of new business solutions; exchanging knowledge, goods and services; and creating multiple possibilities to discover new customers that will be easier to reach if we go where they operate, be it a marketplace like Amazon or a search engine like Google.
APIs in corporate financial management
As part of their everyday routine, treasury departments execute a series of extremely time-consuming, repetitive tasks. Tasks that, on top of everything, are manual and, therefore, prone to error and to increased operational risks.
Treasury Management APIs are designed to provide real-time access to BBVA services through the company’s management systems. They provide round-the-clock access to real time financial information, automating tasks and optimizing critical processes, thus reducing risks.
Bank reconciliation, for example, is one of these processes. According to ‘Treasury Non-Stop’, 77 percent of treasurers believe that real-time treasury will have a high or very high impact on their business systems. 57 percent of respondents surveyed by the report’s authors said they were planning on using APIs in their treasury management processes in the coming years.
The case of qiip
One of the cornerstones of BBVA’s ‘open banking’ strategy is the creation collaboration channels with companies to make it easier for them to offer their customers new services and products suited to their needs. These collaborations are translated into practice in the use of APIs to cater to that demand and offer practical, efficient and secure functionality capable of integrating seamlessly with the company’s platform. This allows keeping processes consistent and saving users the need to leave the environment, thus driving experience and satisfaction levels.
A prime example of this collaboration is BBVA’s partnership with qiip, a Mexican fintech whose ultimate goal is improving people’s financial well-being. In the following video, Marco Almada, head of Cash Management CIB at BBVA in Mexico, chats with qiip team members, who share their experience in the development and use of the BBVA API_Market APIs.
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