More consumers want to manage their money with digital platforms, and regulators are acting fast to protect them. How can banks develop the next generation of compliant, digital financial services?
To launch new partnerships and prepare for the next wave of financial regulations, Alior Bank is embracing the API economy to drive innovation with collaborators and developer communities.
Pavesthe way for compliance with the Second Payment Services Directive (PSD2)
Acceleratestime to introduce new services from weeks to days, keeping competitors at bay
Enablesnew revenue streams by helping to cultivate new partnerships and services
Business challenge story
Becoming a digital disruptor
Banking through new channels is becoming increasingly popular with European consumers, and demand for ever more convenient ways to manage payments and accounts are on the rise. To protect consumers and streamline the payments market, the European Commission recently issued the Second Payment Services Directive (PSD2), which requires banks and financial services to share more customer data with third party payment providers.
For Alior Bank, one of the leading banks in Poland, the new EU directive represented an opportunity. Mariusz Ożga, Head of Incubation & Business Proposition at Alior Bank, elaborates: “In recent years, technology has radically changed the way consumers manage their money and buy goods and services. In response to this trend, we have been directing more resources into further developing our digital offerings, including creation of the Alior Bank Innovation Lab.
“When the European Commission issued the PSD2 directive, we saw this as another opportunity to become more agile, develop our offerings, and provide even better customer service. From our perspective, getting up to speed with PSD2 is another way for us to further enhance our products and services, and perfectly aligns with our Digital Disruptor strategy—a key goal of which is to establish 20 new business partnerships by 2020.”
Even though PSD2 is geared towards streamlining payments for European consumers, it has wide-ranging implications for Alior Bank. For instance, it requires banks to open up customer data to financial service providers—such as payment companies, retailers, and other authorized third-party providers. The European directive also aims to foster greater advances in payment technology, by creating the regulatory framework to enable more seamless cardless withdrawals, mobile payments, and instant Peer-to-Peer payment services.
“At Alior Bank we are not only aiming to become compliant with new regulation, but to also take a leading role in the evolution of consumer banking in Poland. To innovate while at the same time meeting the requirements of PSD2, we have to find a way to collaborate with developers and partners without compromising the security of customer data or the quality of our services.”
Forging fruitful partnerships
With support from IBM Business Partner Tuatara, Alior Bank is building a new ecosystem of partners and developers by opening up access to data and services via IBM API Connect®.
Mariusz Ożga continues: “To find the perfect platform to help us develop the next generation of banking services, we evaluated a number of solutions from different vendors and scored them on aspects including resilience to security threats, ease of use, and cost. IBM API Connect surpassed our requirements, offering an ultra-secure, flexible, cost-effective and intuitive platform that enables us to work with leading players in the financial services sector.”
“Thanks to the expertise of the team at Tuatara, we can deploy IBM API Connect rapidly—accelerating our time to market and keeping us well on schedule for the introduction of PSD2. As PSD2 is so recent, establishing compliance is uncharted territory. Even so, Tuatara continues to demonstrate excellent initiative as we move forward with the implementation process, always providing strategic solutions to challenges as they arise.”
Together with Tuatara, Alior Bank is using IBM API Connect to create environments that offer developers and other financial institutions the opportunity to work together to build banking applications.
“With IBM API Connect, we will provide trusted developers with access to our data via two sandboxes. To ensure the security of our customer details, the sandbox that we will open up to the wider developer community will be isolated from production systems and contain anonymized data.
“The second sandbox will offer selected partners, subject to non-disclosure agreements, the opportunity to work with us to develop, test, and deploy applications using real customer data—making it much easier for them take a front seat in the creation of applications that revolutionize our services. To safeguard customer data and ensure we satisfy data protection regulation, we will host this second sandbox on-premise.”
On the road to compliance and enhanced customer service
With IBM API Connect helping the bank share data with other financial service providers, Alior Bank is building new partnerships to advance banking technology, and is on the way to achieving compliance with PSD2 regulation.
Mariusz Ożga explains: “IBM API Connect is transforming the way we engage with other players in the financial services space, enabling us to open up customer data securely for Fintech developers and payment service providers. By improving our ability to collaborate and build new partnerships, we can play a central role in the future of banking in Poland.
“Not only does the IBM solution make it easier for our partners to access our data and develop new products, it also reduces the time taken to deploy new services from weeks to days. By accelerating the pace at which we bring new services to our customers, we can stay one step ahead of the competition, and react fast to customer demand for enhanced application features and capabilities.”
Since implementing IBM API Connect, Alior Bank has already started to build new partnerships and collaborate on the development of banking services.
Mariusz Ożga concludes: “At Alior Bank we are committed to providing our customers with the best banking services in the world, and plugging the gaps in the market that exist between payment service providers and banks.
“We are currently engaging hundreds of potential new partners to enhance services with mobile sales capabilities and leverage cutting-edge technologies such as biometric security and artificial intelligence. With IBM API Connect we have gained the agility required to become a market disruptor and carve out a leading role in the evolution of banking.”
Based in Poland, Alior Bank aspires to be a leader in the European banking sector within a few years by introducing new management models driven by technological innovation. The Bank is implementing an Open API solution with a sandbox and is planning to launch an iLab, which will work with customers to develop solutions that improve customer satisfaction. Alior Bank is planning to invest ca. PLN 100 million per year in IT and innovations by 2020, including PLN 10 million per year in fintech partnerships and projects.
Take the next step
To learn more about IBM Cloud, please contact your IBM representative or IBM Business Partner, or visit the following website(s): ibm.com/cloud/api-connect
Widely recognized for its industry expertise, Tuatara provides consulting services and helps businesses address challenges with best-of-breed IT solutions. To find out more visit: tuatara.pl
Explore the future of banking technology on the hybrid cloud with IBM to help meet your evolving business needs and customer demands: ibm.com/industries/banking-financial-markets