OPEN BANKING & DIGITISATION: THE NORDICS
THE DIGITAL ‘HELLO’ ,
NORDIC-STYLE Most financial institutions in the Nordics were ahead of the rest of Europe on API connectivity. Rune Mai, Tobias Gustafsson Niska and Masa Peura explore how they stole a lead and what they plan to use it for
Bank, and Masa Peura from Finland’s OP Financial Group, together around a virtual round table to talk about what comes next. Here, they discuss how they’re working to monetise API technology through a new wave of innovation that’s focussed on developing profitable partnerships, maximising efficiency, saving cost and improving customer experience. But we kick off with what we think is the best description we’ve heard yet of what an API is, from Rune Mai…
API – or application programming interface – technology has rapidly gone from being the new kid on the financial services block, to the shortcut to digitisation, particularly for incumbent institutions that can no longer afford to let themselves be hampered by innovation-limiting legacy systems.
“APIs are often badged as the holy grail of the next wave of digitisation, though an API is really just a protocol that allows two computers to speak nicely to each other. They basically follow the same patterns we do, as humans: when I say ‘hi’, you say ‘hi’ to me, and I expect that because it’s the social protocol. “We build similar protocols within the technical space that allow us to make it easier, more secure and more transparent to fetch data from a system that is not yours. Why is that important? Because the end users work more and more in the digital space – possibly ignited by the emergence of smartphones, back in 2008, which made everyone aware that they could have specific apps to serve specific purposes, such as personalisation or massaging data, so that they didn’t need to do it themselves. Facebook also appeared, enabling us to make documentaries of our lives. And all of this was, to some extent, spurred by the interconnectivity of data that allows people to access services where they are, in the apps they want. “Today, banks have that same kind of opportunity to use APIs to build the next level of digital services, keeping them relevant and allowing them to enter different contexts where users expect them to be. “For banks, APIs are a way of sealing off their legacy systems and then working outside them, in order to use external teams to
And, while just two years ago, scepticism remained about the security of all things Cloud, again, in today’s new, COVID-induced world order, it is fast becoming the accepted way to run and scale pretty much any business, to meet growing demand for digital services. All of which is particularly important in an environment where open banking, fuelled by regulation, including the revised Payment Services Directive (PSD2), is forcing organisations to develop at pace to meet the equally fast-evolving expectations of consumers. But while the last 18 months has super-charged institutions to get to grips with this new way of doing things, in the Nordics, they might well ask what all the fuss is about; banks and fintechs there had already built a highly integrated financial services ecosystem. Now, they’re looking for new ways to monetise it. We brought Rune Mai, CEO and co-founder of open banking platform Aiia (formerly known as Nordic API Gateway), Tobias Gustafsson Niska, open banking product developer for Santander Consumer
84
TheFintechMagazine | Issue 21
build new types of solutions, as we’ve seen with Santander’s approach to building a more consumer-facing personal financial management app in Prosper [launched this year in partnership with Aiia].” Tobias Gustafsson Niska agreed that APIs have been critical for Santander bank and large organisations like it. “Product development goes so fast now. If you take six or 12 months to develop a service, you are out of the game. In the year 2000, when I started building netbanks [internet banking services], it was about building cost-efficient systems and decoupling systems from each other to build scale within a company.
www.fintechf.com
