Over the last few
Open banking is, quite simply, a system that provides users with a network of financial institutions’ data, where that data is provided via application programming
Regulators are a large part of the force behind the drive to open banking, and see it as having three main benefits:
- Increase competition and reduce costs: consumers will be able to compare products more easily, ideally resulting in reduced fees through additional competition
- Encourage innovation: innovation potentially creates a competitive advantage for a given market, resulting in that market’s growth
- Address consumer rights: customers own the data that their financial institution possesses, and have the right to share it with other
For banks and financial institutions, there are a couple of key benefits:
- Extend financial services: Open banking allows financial institutions to expand their product offerings and include more services within their portfolio
- Meet customer needs: As customers demand more of their bank, open banking provides an opportunity to offer more services, and keep customers satisfied
As an example, a bank that runs a payment application on the NonStop server and an internet banking application on another platform, may use open banking concepts to quickly integrate these two platforms. This could allow internet banking users new access to payment functions only available through the NonStop application. The reverse could also be true, with the payment application now able to access new transactions via the internet banking application.
Like all new concepts and new technologies, there are also some risks to open banking. Primary among these, at least for banks and FIs, is the potential for significant costs and project overruns in adopting new solutions to create APIs.
The HPE NonStop Server has always occupied a key position in large banks and financial institutions around the world, processing massive amounts of transactions, both in terms of number, and value. As open banking gains popularity, NonStop users need to look at their core NonStop applications to determine how they might evolve into an API-centric world. Of course, new solutions could (and may) potentially be deployed to support entirely new transactions and APIs, but in many cases, existing transactions and capabilities can likely be API-enabled. This will often be a less risky, and less costly approach for many users.
The LightWave product set from NuWave allows NonStop applications to be quickly and easily REST API-enabled, using standard technologies such as HTTP and JSON. These new REST services can be immediately integrated into open banking environments, either directly from the NonStop, or via intermediate technologies like API Gateways (see our earlier API Gateway blog here).
LightWave Server works with existing NonStop applications to allow those applications to provide their transactions as REST services. LightWave Server can be quickly
LightWave Client allows
Extending on the example earlier - a NonStop customer running a payment application like BASE24 could use both LightWave Server and LightWave Client to “open banking enable” that application. LightWave Server would expose the BASE24 transactions as secure REST services, making them ready for open banking. LightWave Client would allow BASE24 to integrate with, and consume data from, open banking services.
Open banking presents some compelling opportunities for NonStop users. Banks and financial institutions that utilize the NonStop as a core part of their transactional environment should understand the impacts of open banking on their NonStop applications. API-enabling NonStop applications will allow them to be part of the open banking ecosystem, ensuring those applications remain strategically placed within the enterprise architecture. This approach can also provide additional value to end customers.