Practical exchange on Open Banking: With 25 guests and two top-class speakers at the Digital Banking Breakfast on September 19, 2018 in Zurich, we discussed various models of how banks can adapt to the requirements of digitally influenced customer groups. Falk Kohlmann, Innovation Manager and Head of Digital Banking at St. Galler Kantonalbank, and Marcelo Victoria, Head of Digital Corporate Bank at Credit Suisse, showed how established institutions use open ecosystems to remain relevant in the long term.
The implementation phase of the PSD2 regulation has begun in the EU and the topic of open banking is also being hotly debated in Swiss expert circles. “Grey is all theory”, we thought and invited representatives of banks who have already breathed life into the abstract approach. We started with SGKB (St. Galler Kantonalbank). Founded in 1868, the regional bank holds a third of the market in the canton. With around 1,000 personnel units and 40 branches, it has a very broad base across the country. It is also pushing ahead with digitisation in many areas.
SGKB on its way to becoming a hybrid bank
According to Falk Kohlmann, management expects online and offline channels to merge into hybrid banks. Since 2016, SGKB has been anticipating this development by developing a wide range of digital solutions – from mortgage extensions and customer opening to mobile banking, personal financial management and the #HäschCash savings app. From October, it will be offering its customers its own SGKB app. It is at the heart of a single app strategy for private customers: They can access all of the bank’s services via their smartphone.
Overall, Open Banking gives financial institutions the opportunity to expand their reach and range of services. On the one hand, it offers products from third parties in its own world and, on the other hand, it is involved in external platforms. It does not position itself as a marketplace, but combines SGKB and third-party services only when it brings additional benefits for the customer. Falk Kohlmann stressed that all scenarios are questioned from the customer’s point of view. In general, use cases are hybrid in nature in order to allow customers to choose between different interaction channels themselves.
In addition, their opinion is included in the new and further development of products. Finally, the innovation manager emphasized that the customer must be clear about what his data is being used for and that he is free to deny data access. While SGKB’s strategy emphasizes the opportunities that Open Banking offers, it also creates new opportunities. But it also creates new challenges. On the one hand, new services and channels must monetize. On the other hand, holistic API governance is needed to keep IT and business complexity under control.
Credit Suisse uses Open Banking as a differentiation criterion
Credit Suisse (Schweiz) AG deliberately uses Open Banking as a differentiation criterion. To this end, it has developed its own ecosystem around its business clients. Via the CS Direct Online Banking Platform, companies can process all conceivable transactions and book and manage services: Onboarding, factoring, leasing, credit, liquidity management, multibanking and so on. The platform can be integrated into your own IT landscape and contains a product platform with third-party services. Credit Suisse has deliberately abandoned the idea of exclusivity in order to secure its role as the first aggregator. It provides a differentiated customer experience via an API architecture that also integrates other banks and third-party providers.
Marcelo Victoria explained the CS-Direct multibanking solution in online banking in more detail, as it makes it plausible how much an open architecture makes everyday work in companies easier. Via a login, the application provides an overview of all worldwide banking relationships and payments via Credit Suisse accounts. Whether at work or on the move: the user always sees the synchronized data, has access to all cash positions and can dispose of his liquidity everywhere. External bank accounts can be integrated cost-effectively and companies do not need their own multibanking software.
For all the approaches we discussed in Zurich, it is crucial that the architecture in the background is as lean as the open banking applications. With our Digital Banking Hub and our Public APIs, we are creating the conditions for this.
Would you like to attend the next Digital Banking Breakfast? Then register now for the event newsletter and we will keep you informed!