Artificial intelligence, big data, cloud computing, blockchain and other technologies are driving the financial industry to a new stage of development, and open banking is becoming the focus of future development of banks. The reporter learned from the industry, so far, Pudong Development, ICBC, CCB, China Merchants, CITIC, Industrial Bank have joined the battle of the open bank.
Open banking, according to Chen Liwu, deputy director of the Science and Technology Department of the People's Bank of China, quoted in the "2018 Second China Internet Finance Forum", is the "API/SDK as the core, integrated artificial intelligence, big data, marking technology, integrated structure and module partitioning, supporting the cooperation of the partners to provide the best possible service. Module assembly, to support the cooperation of the Lego way, in different application scenarios of their own combination and creation, for the financial services agile embedded in the application of the cooperation of the parties, to provide consumers with efficient and convenient financial services".
The origin and promotion of open banking is the UK and EU's exploration of data ****sharing and open data in the banking industry, and the current development model usually includes two kinds, the self-built API platform model and the third-party API platform model.
In China, the Bank of China tried to "open up" as early as 2012, but the effect was not ideal. Subsequently, micro-banking, new network bank, Shanghai Huarui Bank in the open bank made a number of attempts, but did not form a scale.
The open bank really entered the accelerated development period in 2018. in the second half of 2018, a number of traditional banks released the annual report appeared in the figure of "open bank" "API platform", and these banks for the open bank. banks' exploration and practice of open banking. For example, ICBC said in its 2018 annual report that it will use the API open platform "embedded in the scene and outputting finance" and the Jufutong platform that aggregates advantageous online financial products and functions; Pudong Development Bank launched the industry's first API Bank Borderless Open Bank in July 2018; and the Construction Bank declared that it will build an open banking service platform based on the cloud, and through standardized, efficient and effective banking services, it will build an open banking service platform based on the cloud, and through standardized, efficient and effective banking services. Banking service platform, through the standard, efficient way, the financial services, data services embedded in the third party, the banking business will be extended to all aspects of the social life scene. According to the incomplete statistics of YEEO think tank, as of May 2019, more than 50 domestic banks have been online or are building open banking services.
Opportunities
Changing the financial ecosystem
Brett. In his book Banking 4.0, King said, "Banking is everywhere, but not in the bank branch". In the industry's view, open banking gives traditional financial institutions an opportunity to proactively embrace innovation and change the financial ecosystem, which will make banking services ubiquitous.
In the 2018 Shanghai Banking Innovation Report released by the Shanghai Banking Regulatory Bureau, it is pointed out that open banking is a platform business model for the deep integration of finance and technology, and it provides services to customers, employees, third-party developers, fintech companies, vendors, and other partners in the business ecosystem by enjoying data, algorithms, transactions, processes, and other business functions with the business ecosystem***. partners, enabling banks to create new value and build new core capabilities. According to the report, open banking, as an in-depth and advanced stage of fintech convergence, gradually expands the radius of the business ecosystem by building a platformized business ecosystem that combines "going out" and "coming in".
Fan Yifei, vice governor of the People's Bank of China, said in a signed article at the beginning of the year that the new business paradigm of "platform + ecology" should be created by drawing on the model of the open bank, so as to seamlessly embed financial services in various fields of the real economy, break down the thresholds and barriers of the service, broaden the ecological boundaries, reshape the value chain, and promote the development of financial services. "The new business paradigm of financial services will be seamlessly embedded in all areas of the real economy, breaking down service thresholds and barriers, widening ecological boundaries, reshaping value chains, and promoting financial services.
Based on this, many banks have positioned the construction of open banking not just as a tactic, but as a strategy. Because, the open bank by no means only means the opening of the API interface, in the interface behind the open, but also the banking industry business model, management processes, profit mechanism of the depth of change.
Open banking will bring more customers and opportunities to traditional banks. Sun Yang, director of the Financial Technology Center of the Suning Financial Research Institute, believes that with the opening, traditional banks will be more grounded. Banking services are integrated into a variety of vertical Internet scenarios through the bank's open platform, such as superstores, haitao, music, online car rental, and takeaway platforms, which means more customer sources, more active customers, and more high-value traffic.
Challenges
Don't follow blindly in a hobbling start
However, it is widely recognized in the industry that the development of domestic open banking is still hobbling. McKinsey pointed out in its report, in the specific practice, the domestic open bank compared with the United Kingdom, the European Union and other open bank forerunners have deficiencies. McKinsey pointed out that these deficiencies are concentrated in the following aspects: first, the strategy is not clear; second, ignoring the external financial technology innovation power, the open API is simply used as a tool for attracting traffic to the bank through the third-party platform, and there is no joint third-party platform technology development power*** with the creation of innovative products and services for the customer; third, the organizational mechanism is not agile enough, despite the transformation of IT system Third, the organizational mechanism is not agile enough, despite the transformation of the IT system to optimize and technically realize the platform support for rapid iteration, but the organizational mechanism still follows the traditional product delivery model of the bank, which is difficult to cope with the rapid changes in the market.
Zeng Gang, deputy director of the National Laboratory for Finance and Development, believes that the banking industry should be more calm and objective about open banking, because "the practice of open banking in the true sense of the word may face considerable challenges in China, and should not be detached from the actual needs of the hot concept of blindly following the wind.
In Zeng Gang's view, there are three main points of uncertainty. The first is the uncertainty at the regulatory level. He believes that, unlike the UK and Europe, where the government has introduced specific policies to lead the promotion of the model, and unlike the United States in the perfect legal basis and mature function of the regulatory market innovation, China in the relevant supporting laws, regulations and rules and regulations have to be further improved. First, in terms of citizen data, especially financial data **** enjoyment, open banking practices face greater policy uncertainty. The collection and use of citizens' personal information is subject to stricter regulation, while financial data, as one of the most sensitive categories, is becoming increasingly costly to obtain and apply. In order to prove the legitimacy of data collection, the notification agreements signed between institutions and users are also becoming more and more complex and lengthy, which increases the legal and compliance costs of institutions as well as the time costs for users to read and understand them. Secondly, in terms of data access, use and **** enjoyment, some open banking business attempts are still wandering in the gray area between what can and can't be done, and there are still many regulatory issues that need to be resolved, facing greater policy risks.
Second is the challenge of cross-border competition from fintech companies. In the cross-border competition between banks and financial technology companies, licenses and data are the most important moat for commercial banks. The open banking concept does not necessarily enable the banking industry to improve its capabilities, but will enable fintech companies to enjoy most of the benefits. Currently, banks are at a disadvantage compared to fintech companies in terms of scene construction, user reach, and traffic acquisition, and open banking does not cultivate customer acquisition for traditional commercial banks, but rather cedes the interaction with users to the public, and takes a backseat to the "bank as a service".
Finally, there is the issue of the limitations of the bank's own capabilities. Open banking is not just a matter of technical input, its development also requires banks to change the traditional business philosophy, governance structure, information systems and IT development process and its supporting, and Chinese commercial banks are large, long organizational management level, corporate culture is relatively solidified, to completely change the concept and implementation of the ground, is not an easy thing.
Source: China Insurance News
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