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Microsoft in Business Blogs

man looking down at his phoneCustomers are increasingly approaching banking with a digital-first mindset: they expect to be able to perform a range of financial activities from any device. Digital disruptors in the financial services space are offering these services, creating new competition for banks. Adoption of cloud technology has created a world of possibilities for banks, allowing a widescale shift from branch-based engagement to digital engagement.

In open banking, banks empower customers to easily access their own data and share it securely with other financial services providers. This creates new opportunities for banks to interact with other ecosystem partners in ways that can improve their own engagement with their customers. Banks can compete in this new landscape by partnering with technology providers like TIBCO who are leveraging the power of the cloud to deliver the flexibility and privacy that customers want.

A customer’s data has historically been owned by the bank, but customers have more power in a digital world not only to switch banks frictionlessly but also to consume products and services from other types of financial services. The digital disruptors in the banking industry are giving customers an unprecedented amount of choice: they may have a personal banking account with one bank, a mortgage from another, and investment banking from yet another. All the while, they may be using an entirely different provider to track their financial journey analytics. The key technologies that power open banking all begin by building on the cloud.

APIs secure and standardize data exchange

How can a single bank compete with this buffet of consumer options? By empowering the customer to easily access their data and share it securely with other financial service providers, the core bank can own the relationship with the customer without owning the data. Instead of trying to compete with the fintechs, banks can become the entry point for this ecosystem of partners. This allows the bank to become the trusted orchestrator to help customers achieve their holistic financial goals.

Banks power these advanced capabilities and provide this secure access to customer data through application programming interfaces, or APIs. APIs are a way to exchange data between these different financial services providers, and API management technology enables banks to publish and consume APIs safely and securely. API management also reinforces security with fundamental capabilities such as a gateway, developer portal, and administrative UI with reporting and analytics capabilities.

Support for global standards in data transfer and API specifications (such as the Open Banking Standard, OpenAPI Specification, and more) enables greater security and lower risk for data transfer from third parties. Further, authentication of the customer’s and the receiver’s identities using technology like identity and access management (IAM) supports compliance requirements while also delivering greater security to the bank and the end user.

Additionally, API management can provide a mediation layer between legacy back-end banking systems and more modern applications, so banks that haven’t fully migrated to the cloud can still operate in a hybrid environment.

Data management ensures the availability of accurate data

One fundamental of digital banking is proper data management. Building on cloud infrastructure enables banks to have a consistent and uniform set of information across the entire hybrid IT landscape.

Poor data quality or poorly managed data can create problems such as data theft and exposure, regulatory fines, and loss of consumer trust. Good data governance ensures that the proper controls are in place so that all data either created or acquired from a third party is collected, verified, stored, and deleted in compliance with privacy and anti-money laundering regulations. It makes the data more readily available to be securely shared with third parties while making sure that only authorized people can access it. In short, data governance creates visibility of the full lifecycle of how the data is used, where it’s moved, who has access to it, and how it’s disposed of.

Advanced analytics do more with the data

Once the data can pass securely to and from third parties, there’s an opportunity to add advanced analytics. For example, by applying technology like Microsoft Cognitive Services and TIBCO’s own advanced analytical capabilities, banks can start using what we call automated decisioning—doing things like presenting real-time offers to the customer based on their activity. Advanced analytics can also bolster crime detection by spotting anomalies that could point to money laundering, identity theft, account takeovers, hacking attempts, and other malicious acts.

The cloud opens new possibilities

Combining TIBCO’s API-led integration and data management features and advanced analytics with the scalable, resilient Azure cloud opens possibilities for banks that were unimaginable a decade ago. Once open banking fundamentals are in place, banks can think about the final piece: “With all of this data, what can we do differently?”

It’s exciting to support this shift in financial services and see banking partners apply the tools that Microsoft and TIBCO create. With our tools and their vision, they are using the data in new ways to bring groundbreaking products to market.

Learn more about delivering next-generation customer experiences in open banking with this webinar.