Sibos 2022: Open banking in the UK

Ahead of Sibos 2022, Finextra spoke with Dan Globerson, Head of API Banking at NatWest, to explore how he leads the bank’s regulatory engagements in the UK and Europe, fostering a culture of enabling APIs and collaborating across the industry. by setting standards.

The Bank of APIs was built on the foundations of open banking in the UK, the first country in the world where the initiative was regulated. It is essentially an API ecosystem that brings a variety of services to NatWest customers and partners in new ways.

Reviewing the evolution of open banking in 2023, Globerson stressed that his team’s work is based on “a policy in terms of working and collaborating with industry bodies, other banks and regulators themselves. themselves to define what an ecosystem for open banking and beyond might look like”. .”

Beyond regulators’ basic requirements for open banking, banks saw 2020 as a year to consolidate their open banking strategies amid unprecedented challenges. Coming out of the Covid-19 pandemic in 2021, the conversation about open banking in the UK quickly shifted to areas such as open finance and smart data, and ultimately, “open everything up”, as put it. describes Globerson.

In 2022, UK banks have grown from the lessons and successes of open banking and are now thinking about how to apply them to the wider ecosystem, while continuing to ensure we are all in control of our own data.

Globerson added that “we are in the process of having extensive industry-wide and regulatory discussions about what will drive the next steps. That’s the big thing in 2022. Will market forces push open finance and beyond to open everything up? Do we need regulation or a combination of both? Do market forces create a strong enough incentive to develop services such as open finance? That may be the real question that needs to be answered,” said Globerson.

While NatWest, one of the CMA9 banks, has earned a reputation for being progressive in open banking, the bank now recognizes that the ecosystem that was built for personal finance and small business is suited to provide digital service companies. PSD2 was certainly not intended for large enterprises, but there is an opportunity there.

Globerson clarified that there are two sides to this equation: what open banking, open finance and open data mean for business, and what it means for business. “We work with our customers to provide them with instant connectivity via APIs to link their accounts and initiate payments on a technology basis.

“From a treasurer’s perspective, it improves a lot of things depending on the type of business. It reduces operational overhead, operational risk from manual processes, and optimizes cash flow and liquidity in real time. It can automate and digitize everything related to cash management, but the flip side is that corporate treasurers would also be very interested in how to improve their customer experience. This is the second derivative of this: what can a company do now with access to API services? »

It’s not a new concept and is already underway in some banks, with solutions hitting the market and data being used to improve the customer experience. However, the game changer here will be open data, increasing the amount of quality data available and depending on the digital maturity of the sector at the time, incumbent banks will start partnering with startups to leverage this opportunity.

Finextra will cover Sibos live from Amsterdam from October 10-13. Be sure to stay up to date with all event news and announcements via Finextra’s Live @ Sibos page throughout the week.