apidays LIVE LONDON - The Road to Embedded Finance, Banking and Insurance with APIs
How APIs are changing the fintech world
Chirine BenZaied - Bourgerie, Innovation Director at Finastra
apidays LIVE LONDON - How APIs are changing the fintech world by Chirine BenZaied - Bourgerie
1. How APIs are
changing the
fintech world
The Finastra transformation experience with FusionFabric.cloud
2. HOW APIS ARE CHANGING THE FINTECH WORLD
Banking as a Service & Embedded Finance*
Open Banking
Retail&SMEBanking
Brand
BaaS
service
providers
License Holder
CorporateBanking&CapitalMarkets
*11:FS Banking as a Service report
3. FROM OPEN BANKING TO BAAS AND EMBEDDED FINANCE
Big-Techs launch Financial Services globally
New business
models
emerging
FinTechs
unbundle the
traditional
Financial
Institutions
4. HOW APIS ARE CHANGING THE FINTECH WORLD
Banking as a Service & Embedded Finance* Open space, still to be explored!
Open Banking Open Finance
Retail&SMEBanking
Brand
BaaS
service
providers
License Holder
CorporateBanking&CapitalMarkets
*11:FS Banking as a Service report
?
6. Finastra FACTS
% of FY18
Total Revenue
Notes: 1 Headcount and office location count as at 31 May 2018 | 2 Based on FY18 IFRS 15 results | 3 Source: Bureau Van Dijk July 2016 | 4 Retention rate
measured on a ‘dollar for dollar’ basis against operating maintenance revenue (RLF) and excludes impact of any migration deals
INTERNATIONAL REACH 2
UNMATCHED SCALE AND STRENGTH
~94%
retention rate4
8,500+ clients~$1.9bn revenue 2
FOOTPRINT 1 PRODUCT AND SERVICE OFFERINGS
10,700+ employees
~70 offices
• US Retail Banking
• International Retail Banking
• Corporate Banking
• Payments
• Treasury and Capital Markets
• Technology Enhanced Managed Services
of the world’s top
100 banks by
asset size3
90
Americas
56%
MEA
7%
Europe
29%
APAC
8%
$
Present in
130Countries
DIVERSE, LOYAL CUSTOMER BASE
November 2, 2020
7. OUR SOLUTIONS
THE BROADEST AND DEEPEST RANGE ON THE MARKET
November 2, 2020
Payments
Risk Management
Corporate
Banking
International Retail
Banking
US Community
Markets
• Structured Lending
• Commercial Lending
• Trade Finance
• Supply Chain Finance
• Cash Management
• Omni-Channel Banking
• Origination
• Customer Relationship
& Analytics
• Personal Banking
Products
• Omni-Channel Banking
• Origination
• Customer Relationship
& Analytics
• Business Lending
• Consumer and
Mortgage Lending
• Payment acquisition
• Normalisation
• Orchestration
• Clearing
• Payment Services
• Processing
1 2 3 4
6
Treasury &
Capital Markets
• Treasury Management
• Multi-asset Trading
• Post-trade Processing
• Prime Brokerage
• Investment
Management
5
8. 175M+
Retail Accounts
8%
of Daily FX
Trading
67%
of Total
Syndicated
Loans
of Daily Trade
Finance6% of US Wire
payments
27% of all U.S.
Financial Institutions
4.0M
loans in the US
every year
$70Bin US-
originated
mortgages
annually
25%
Facilitating
Finastra Proprietary Information – Do Not Redistribute
10. A Complete Set of Capabilities for Innovation
API
Enables a Fintech or FI to use a banking service
Example: Monotto, PFM
SPI
Enables an FI to use a Fintech service
Example: Netguardians, Fraud Detection
Event
Enables a Fintech to subscribe to all broadcasts from a Bank
Example: Fusion Credit Connect, Letter of Credit
Data Share
Enables a Bank to push big-data to a Data Lake for a Fintech
Example: Vector Risk, Machine Learning
Faster time to market, lower overall cost to integrate and create.
Financial
Institution
Fintech Data Lake
13. Some of our Apps and… and some of the Clients using them…
Fusion Credit
Connect
Allied Bill
Payment
Robosave
Fusion
Mortgagebot POS
Data Insights
Fusion
Analytics
Predictive
Engagement
Platform
Flybits Honeyfi
Fusion Payment
Insights
RoamHR
FinGoal
Fusion
CreditQuest
Lender Insights
14. THE FINASTRA TRANSFORMATION EXPERIENCE
EVOLUTION FROM BUILD TO BUY AND THEN TO COLLABORATION
SolutionsPRODUCT
Best of Breed
SOLUTION
Best of Breadth
BANK AS A
PLATFORM
Collaboration
DIY
Bespoke
MARKETPLACE
Monetization
Custom built infrastructure
and software
Concentrate on Core+ APIs
Innovate through FinTechs &
Eco-system
e.g. Credit Connect, HubX,
Netguardians
Use of pre-integrated
all-in-one solutions
e.g. Connected Corporate
Banking
Build Buy Collaborate
+
Create new business models by
connecting “buyer” and “seller”
e.g. Fusion LenderComm
Use of market leading
isolated products
e.g. Fusion Loan IQ, GPP,
Kondor
+
Cross the chasm Cross the chasm
17. …and a life-changing
experience!
A global fintech hackathon…
Nairobi, KENYAMequon, USA
78%
Used
FusionFabric.cloud
43%
Used
Machine Learning
Hack To The Future 2019
1,080
hackers
38
countries
235
ideas
122
ideas
published
Casablanca, MOROCCOTunis, TUNISIA
22%
Used
data platform
18. | Global | Virtual |
| High Innovation | Real Outcomes |
Embrace
technology
-enabled
change
Hacking
through
COVID-19
Hacking
systemic
inequalities
THEME
1
THEME
3
THEME
2
• Banking the unbanked/underbanked
• Socially responsible investments & ESG
• Building inclusive technology
• Driving financial literacy
• Establishing ecosystems beyond finance
• Cross-business intelligence layers with AI
• Reimagining transaction flows with DLT
• Integrating physical & digital experiences
• Digital, also behind the scenes
• Embedded fintech, across industries
• Finding new growth streams
• Managing risk in a post-COVID world
https://fintech.devpost.com/
Open banking via PSD & global trends
Banks opens services via secure APIs, consent mgt, etc to fintechs
Replacing webscrapping
Gain in sophistication with BaaS and embbeded finance
11:FS report
Brand, service provider and license holder
MODULARITY: from monolith to more granular architecture, service, agility, flexibility, etc.
Let’s look at some examples
Granularity in services that fintechs now provide replacing the traditional monolith
Some BaaS service providers
Bit techs players also entering the space, as brands or service providers – watch that space!
Now this is very interesting, though I’m sure you’ve noticed this only on consumer space (+ some players operating/entering the SME space)
2nd D is verticals – corporate banking & capital markets
here it’s just the beginning of « Open Finance »,
We’ll see more about it with the Finastra experience in that space
Now the 4th quadrant???? Watch out this space! ;)
Now let’s take a look at the Finastra experience!
But first, do you know Finastra? Have you heard the name before?
used to be software provider for FI – technolofy for finserv
Now this is called « fintech », and we’re one of the largest in the world
10k people
8k clients
$2bn revenue
Global presence
Serving almost all segments that a traditional bank would serve
More on these segments:
Retail US community mkt (10k credit unions and community banks) – consumer & SME banking & lending
Retail row
Corporate banking: commercial & syndicated loans trade finance, cash mgt
Payments
TCM: buy side (hedge fund, asset managers) and sell side (investment banks)
Enterprise risk
A data perspective to it (that illusitrates better the benefit in opening the systems with open apis: daily trade, daily fx, more dramatic global syndicated loans!
So here is what we’ve done – started a couple of years ago
opening the systems used by our customers, x these segments
Enabling fintechs, startups and other innovators to
access the APIs and connect their apps – dev portal
Help them collaborate/GTM with banks - mktplace
On the devportal side:
- APIs enable 3rd party connectivity to our core solutions eg read and write information – so whether a financial institution or bank, you can access and leverage capabilities and services from our core solutions to enhance and accelerate your own innovations and application
- A subset of API includes Service APIs - core agnostic APIs eg Libor Transition Calculator or IBAN Validation to enhance app functionality or extend a core service regardless of core product being used
- SPIs (Service Provider Interface) are like a reverse API – enables an out-going request, eg NetGuardians relies on our Fraud Risk Analysis SPI to notify them of a Finastra transaction taking place
- Event – enables push notifications/messages to the app developer of an event or update
- Data Share – facilitates connections using data sets, access to synthetic or real data sets from Finastra solutions to enable data use-cases and data-share capabilities
Interesting drill down by LoB
LIVE NOW:
We now have over 24 live apps available on the FusionStore, among those include many of our own apps such as:
- Fusion Credit Connect – Links SalesForce to Fusion Credit Management Enterprise and Fusion LoanIQ with to provide a powerful data dashboard, supporting RM’s with actionable insights -
Fusion Analytics – which aggregates account holder behaviors to help account managers identify opportunities for engagement and growth.
The is also a growing number of Fintech apps on the store, the currently include ones like:
Allied Bill Payment – which allows consumers to pay bills from thousands of companies within their banking app
Robosave from Monotto – which is an analytics based automated savings tool
Certified Fed is a US based credit union who is using Allied Bill Payment. Their CIO said it was the easiest integration in all his 20 years with the Credit Union – taking days rather than the usual months.
APPS COMING SOON:
But expect to see many more apps launching onto the FusionStore over the coming months – we are aiming for over 50 new apps this year, a couple to call out:
Net Guardians – AI based fraud detection across multiple types of fraud in all areas of banking
Active AI – AI based virtual assistant to provide insights and engagements for Corporate Banking users
Kore.ai - Conversation AI chatbot app for basic banking transactions and customer queries
Raise Partner – Portfolio optimization for investment management clients
NOW how did we get there??
- But even before recent changes, the way Financial Institutions were approaching software was already changing…
- Organizations of any size can now select the technology model that best suits their business, from building custom infrastructure and software through to differentiation and focus via buying products or connected solutions, through to a model based on collaboration using sandboxes, open APIs and third party capabilities.
Key learnings for this journey:
platforms are growth accelerators – we see that with Finastra, it’s a strategic move we’ve done a ocuple of years ago, and is still today the major transformation initiative we’re heavily investing in
Corporate banking and TCM really require this open finance move to transform
Key innovation blockers there
SMExpertise – knowledge (fintech founder are older in that space!)
Access to data
OPEN finance will help address 2. and that will drive 1.
Open is definitely the way forward in fintech, and though a couple f years ago, we’d still see a couple of reluctant players, today most banks/traditional players are open and collaborating with fintechs in different ways
Now one last example on the power of OPEN!
Hackathons!!
At Finastra we run lots of these, here you see our Dec-19 global fintech hackathon (pre-COVID!!!)
Open the industry data/APIs and challenges to the world – anyone can be a fintech innovator!
1000+ hackers, 38 countries, lots of ideas/projects, and great stories bringing together industry professionals & students
And now, it’s time for our 2020 hackathon! Looking again to open some of the most urgent challenges of the world (where the fintech industry can play a key role)
Building on the success of our 2019 hackathon, with 1000+ hackers from 38 countries, we’re delighted to announce #hacktothefuture 2020 and to invite you to get involved.
This year, we go GLOBAL! We go 100% VIRTUAL! And we’re hacking for GOOD.
Today there are 1.7 billion unbanked, an SME funding gap of over $5trn and 45 million student loan borrowers facing $1.56 trillion of debt in the US alone
Hack to the Future 2020 is all about hacking for good – and we’ve got three major themes. Hacking systemic inequalities, such as removing bias from financial services, Embracing technology innovations that are transforming the financial services industry, like AI/ML, DLT, etc. and hacking through the pandemic, focusing on risk management and growth amid uncertainty.
Its easy – simply visit www.FusionFabric.cloud, take a look at our API catalog and sign up for a free account to start developing and innovating today.
(This would be a good time to switch over to show how easy it is to look at the API catalog and FusionStore on FusionFabric.cloud)