Banking on the Platform Economy - The Next Wave of Disruption in Banking Bharat Bhushan, CTO - Banking & Financial Markets Europe at IBM

1. API Days – Banking on the
platform economy
The Next Wave of
Disruption in Banking
1
Bharat Bhushan
CTO – Banking & Financial Markets Europe
@_bharat_

2. IBM Confidential2
Search “IBV Banking on the platform economy”

3. IBM Confidential3 Search “IBM financial services cloud”

4. AI Everywhere
Retail Banking
Commercial
Financial Markets
Business Process
Automation
Cloud as a New
Technology
Platform
Enterprise Cloud
Business Solutions as a
Service
Deeper Insights
& Redefining
Computing
Security
Analytics
Neuromorphic systems
Quantum computing
Banking as a
Platform
Platform Economy
APIs
OpenBanking and
Ecosystems
Blockchain and
New
Collaboration
Trade Finance
Digital Identity
Shared KYC
Cross-border
Payments
Source: IBM Research
Technology innovations driving banking
industry transformations

5. Platform definition
46

6. 21© 2019 IBM Corporation |
Market Platforms: Brings together producers and consumers
providing infrastructure and rules for a marketplace. Enable trusted
exchange between diverse participants at scale. These are widely
leveraged, mainly customer-centric platforms that have been the
disruptors of the past decade.
Business Process Platforms: Enable industry participants to unlock
the value of data and to reinvent workflows by recomposing their
organization with cognitively-infused redesigns of key processes and
operations. These platforms differentiate an organization by
combining data, workflows and expertise to drive competitive
advantage.
Technology Platforms: Enable users to access secure infrastructure,
share in the benefits of technological scale and focus resources more
on what makes them unique. These enable application and
infrastructure platforms that underpin workflows and support
business process platforms.
Industry Examples
German Regulatory Reporting
Factory
Nordic KYC
Types of Platforms

7. Banking and Non-Banking Experiences Save Time + Be Financially Better Off
Rewards
Partner Banking Products
Non-FSS productsNotifications
Tea-and-coffee for 2
Free Cinema Tickets
Travel Products
You could save 20% more
In University Fund (show me)
We can get £200 in
compensation for your
delayed flights to Malaga
Virgin Gyms
90% discount - £14.99
Your Pet care
40% cheaper - £5.99
Secured Loans
Additional Private Pension
BUPA Family Health
Check for £799 only
3
The Vision of the Customer Experience
Spend Analytics
Alerts
£1,742.09
Credit Card
Personalised Offers
Spend Analytics
Alerts
£1,242.89
Current Account
Personalised Offers
See details
Call Us
£50,100
University Fund
Compare Child Trusts
See details
Call Us
£35,200
Retirement Fund
Compare Savings
See details
Call Us
£750,000
Pre-approved
Mortgage
Switch Mortgage
!

10. Consumer/ Retail Banking Business Banking
Be financially better off
Save time
Corporate services – Accounting, Taxation,
Cashflow, Treasury, HR
Admin services – Cleaning
Digital CXO services
Utilities – gas, water and electricity
Request to Pay
Pay later (Lending)
Save overdraft charges
B2B2C Payments
Platform for business banking
Aggregate and analyse multiple bank
accounts and provide insights
Help find better suited utilities – gas, water
and electricity, internet, media &
entertainment
Compare and find suitable and affordable
financial products
Improve Savings, Tax, Investments, tips
and coaching on the value of money
Life Skills
Use cases of client value and innovation

11. Will my bank become a dumb pipe?

12. May be. But, be a smart dumb pipe!

13. enabled by smart APIs

14. Digital Banking Platform
46

15. MID RANGE APPLICATIONSCOMPLEX APPLICATIONS DATA SYSTEMS LANDSCAPE
DIGITAL CHANNELS
DIGITAL BANKING PLATFORM
DATA SVCS. (DaaS, ANALYTICS, COGNITIVE INSIGHTS) DIGITAL AGILITY SERVICES (MICROSERVICES, API, CONTAINERS) AUTOMATE
HYBRID MULTI CLOUD ENABLED PLATFORM
CaaS PaaS
IaaS
CaaS PaaS
IaaS
CaaS PaaS
IaaSLegacy
ON PREMISE OFF PREMISE
SaaS
Digital Banking
Platform
The Digital Banking Platform builds a Bridge from Core to Cloud
49

16. Reusable Services
DIGITAL BANKING PLATFORM
The Next Gen Functional Architecture for Banking
50

17. Key Elements of Digital Banking Transformation
Leveraging a digital
agility layer to accelerate
digital transformation
Sourcing banking capabilities
as-a-service in a modular marketplace
services ecosystem by LOB
Services Ecosystem
Business and technical Infrastructure
Operations
Production
Interaction / ChannelsBusiness Develop-ment Finance,
Risk & Compliance
Customer
Sales & Servicing
Planning
Customer
Sales & Servicing
Oversight
Employee
Payroll & Tax
Employee
Benefits Administration
Workforce
Training &
Development
Employee
Assessments
(Recruitment)
Employee Status
& Reference
Information
Employee
Travel &
Expenses
Human Resources
Oversight
Human Resources
Policies &
Planning
Employee Assignment
& Usage analysis
Worker
Qualification
& Certification
Alliances
Planning &
Analysis
Alliances
Oversight
Alliances
Administration
Business Unit Planning
Business Unit
Administration
Business Unit
Oversight
Business Strategy
& Enterprise
Planning & Analysis
General Ledger
(Financial Statements)
Corporate
Legal
Services
Business Systems
Planning
Business Systems
Oversight
Business &
Systems
Architecture
Systems
Operations
Knowledge
Exchange
Systems Development
and Deployment
Production Assurance
(Help Desk)
Business
Policies &
Procedures
Intellectual
Property
Maintenance
Audit &
Legal Compliance
Business
Development
Policies & Planning
Segment Planning
& Analysis
Market &
Competitor
Analysis
Market
Research
Business
Development
Oversight
Market Research
Management
& Oversight
Product
Deployment
Oversight
Product
Portfolio Planning
Product Development
Product Design
Oversight
Product
Bundling
Product
Deployment
Fund/Market Asset
Planning &
Development
Fund & Debt/Equity
Instrument
Oversight
Customer
Portfolio Planning
Acquisition
Planning (Adv/Ext/Int)
Campaign
Oversight
(Adv/Ext/Int)
Customer
Behavior
Modeling
Advertising
Execution
External Campaign
Execution
Customer
Reference
Information
Customer
Portfolio
OversightApp
Corporate Relations
Policies &
Planning
Corporate
Relationship
Management
Corporate
Relationship
Administration
Corporate
& Institutional
Communications
Stakeholder
Investment
Relations
External (Investor)
Relations
Internal Campaign
Execution
Sales
Support
Adminis-tration
Product/Sales
Inventory
Distribution
Customer
Reviews, Surveys
& Research
Training &
Awareness
Facilities
Maintenance
& Operations
Fixed Asset
Register
Facility
Administration
Facilities &
Procurement
Policies & Planning
Procurement
Facilities &
Procurement
Oversight
Customer
Agreements
Customer
Contact/Event
History
Customer
Credit Rating
Execution
Case & Exception
Handling
Agreement &
Relationship
Oversight
Customer
Transaction
Consolidator
Entitlement
& Sales
Customer
Relationship
Management
Brokered
Product
Sales
Underwriting
Correspond-ent
Bank
Administration
Correspond-ent
Planning &
Oversight
Branch
Non-cash
Inventory
Administration
Channel
Operations
Network
Oversight
Operational
Services
Oversight
Fails
Handling
Operations Planning
Counterparty
Administration
Market
Data/Feed
Operation
Market Asset
Maintenance
(Corporate Events)
Reference and
Directory Data
Maintenance
Market
Information
Maintenance
External Data (IP)
Planning &
Assessment
Information
Provider Oversight
& Administration
Agency / Broker
Commissions
Administration
Agency &
Broker
Oversight
Production
Planning &
Analysis
Production
Oversight
Document
Management
& Archive
Payments (Wire Room)
Financial
Operations
(A/C Receivable)
Collateral
Administration
Collections
& Recovery
Credit/Margin
Policy &
Planning
Credit/Margin
Oversight
Market Regulatory
Relations
Administration
Enterprise
Portfolio
Tracking
Cash Flow/
Maturity Ladder
Maintenance
Asset
Securitization
Enterprise
Portfolio
Oversight
Enterprise
Portfolio Planning
Market
Risk & Scoring
Models
Enterprise
Portfolio
Management
Treasury Operations
Operational
Risk
Management
Regulatory
Compliance
Guideline
Compliance
Market Information
(switch) Operation
Trader/Book
Oversight
Market
Trading
Market
Execution
Program
Trading
Customer Contact
Routing
Customer
Status
Customer Contact
Handler
Automated
Teller
Call Center
(VRU)
Customer
Counter/
Teller
Self Service
Web
Market Asset/Trust
Custodial Services
Clearing and
Settlement
Shareholder
Services
Account
Reconciliation
Position/ Balance
Management
Consumer
Accounting
Corporate
Accounting
Market Asset
Valuation & Pricing
(Mark to Market)
Cash & Currency
Handling
Investment
Finance
Services
Consumer
Credit Facility
Management
Correspond-ence
(incl. statements)
Fraud/AML
Detection & Resolution
Customer
Accounting
Oversight
Taxation
Administrative
Services
Depository
Receipts
Stock
Lending
& Repos
Market Making
Funds/Market Asset
Administration
Unit Trust
Mutual Fund
Hedge Fund
Investment
Portfolio
Management
Investment
Portfolio
Administration
Investment
Portfolio
Planning
Portfolio
Performance
Analysis
Consumer
Banking
Trust
Services
Consumer
Lending
Authorizations
(cards)
eTrading
Portfolio
Services
Cards
Fulfillment
Lock-box
Operations
Consumer
Processing
Oversight
Brokered
Consumer Product
Coordination
Check
Processing
Funds Transfer
& Remittance
Services
Financial
Capture (Cards)
Merchant
Relations &
Operations
Real
Estate
Merchand-ise
Financing
Corporate
Processing
Oversight
Syndicate
Maintenance
& Administration
Corporate
M&A & Advisory
Services
Trade
Finance Services
International
Trade
Services
Corporate
Lending Bank Guarantees
Cash
Management
Services
Prime Brokerage
Services
(Buy Side)
Instrument
Issuance Debt/
Equity
IPOPrivate
Placement
Financial Market
Analysis
Financial Market
Analysis
Oversight
Quantitative
Analysis
Services
Market Order
& Services
Oversight
Trade
Confirmation
& Allocation
Order
Management
Investment/
Trading
Policies & Planning
Debt
EquitiesFX/MM
Derivatives &
Off-Balance
sheet
Commod-ities
Business Unit
Tax
Administration
Financial
Planning
Finance & Risk
Management
Planning
Finance & Risk
Management
Oversight
Business Unit
Financial
Administration
Financial Control
& Reporting
Oversight
Business Unit
Accounting
Business Unit
Financial
Operations
Information
Dissemination
Direct
Product Performance
Oversight
Rewards
Administration
Entitlement
Processing
Fee & Billing
Services
Account Services
Planning
Business and Technical Infrastructure
Production / Operations
Interaction / ChannelsBusiness Develop-ment Finance,
Risk & Compliance
Channels
Customer and
Product Development
Finance, Risk &
Compliance
Core Banking
Monolithic
Modular
Bank owned
IBM provided
IBM curated / certified
Open Marketplace
DIGITAL AGILITY LAYER
API Layer: Developer portal, access
control and security, discovery and
routing, scalable runtime, analytics
Microservices Layer: Polyglot & scalable
runtime, registry and discovery, load
balancing, tracing and monitoring,
security, with rules and flows
Integration Layer: ESB, data integration
Middle / Back Office
Interaction / Channels
Agency &
Broker
Oversight
Production
Planning &
Analysis
Trust
Services
Agency &
Broker
Oversight
Production
Planning &
Analysis
Trust
Services
Agency &
Broker
Oversight
Production
Planning &
Analysis
Trust
Services
Agency &
Broker
Oversight
Production
Planning &
Analysis
Trust
Services
Agency &
Broker
Oversight
Production
Planning &
Analysis
Trust
Services
Agency &
Broker
Oversight
Production
Planning &
Analysis
Trust
Services
Agency &
Broker
Oversight
Production
Planning &
Analysis
Trust
Services
Agency &
Broker
Oversight
Production
Planning &
Analysis
Trust
Services
Agency &
Broker
Oversight
Production
Planning &
Analysis
Trust
Services
Agency &
Broker
Oversight
Production
Planning &
Analysis
Trust
Services
Agency &
Broker
Oversight
Production
Planning &
Analysis
Trust
Services
Agency &
Broker
Oversight
Production
Planning &
Analysis
Trust
Services
Agency &
Broker
Oversight
Production
Planning &
Analysis
Trust
Services
Agency &
Broker
Oversight
Production
Planning &
Analysis
Trust
Services
Agency &
Broker
Oversight
Production
Planning &
Analysis
Trust
Services
Agency &
Broker
Oversight
Production
Planning &
Analysis
Trust
Services
Agency &
Broker
Oversight
Production
Planning &
Analysis
Trust
Services
Agency &
Broker
Oversight
Production
Planning &
Analysis
Trust
Services
Agency &
Broker
Oversight
Production
Planning &
Analysis
Trust
Services
Agency &
Broker
Oversight
Production
Planning &
Analysis
Trust
Services
Agency &
Broker
Oversight
Production
Planning &
Analysis
Trust
Services
Agency &
Broker
Oversight
Production
Planning &
Analysis
Trust
Services
Agency &
Broker
Oversight
Production
Planning &
Analysis
Trust
Services
Agency &
Broker
Oversight
Production
Planning &
Analysis
Trust
Services
Agency &
Broker
Oversight
Production
Planning &
Analysis
Trust
Services
Agency &
Broker
Oversight
Production
Planning &
Analysis
Trust
Services
Agency &
Broker
Oversight
Production
Planning &
Analysis
Trust
Services
Agency &
Broker
Oversight
Production
Planning &
Analysis
Trust
Services
Transforming monolithic
operating model into modular
business architecture
53

18. MULTI-CLOUD FOUNDATION
IBM DIGITAL BANKING MARKETPLACE & ECOSYSTEM
BIAN TRANSFORMATIONLOAN REQUISITION
ACCOUNT OPENING
MULTI ACCT MGMT
CUSTOMER CHURN BANKING BIAN TEMPLATES
CUSTOMER SEGMENTATION
BANKING INDUSTRY MODELSKNOWIS LENDING PACK
API ADAPTORS
BANKING APPLICATIONS INTEGRATION PACKSINDUSTRY ACCELERATORS INDUSTRY MODELS BANKING APIS
TECHNOLOGY FOUNDATION
Logging
Monitoring
Metering
Persistent Storage
Kubernetes
Security
Identity Access Mgmt
Docker Registry
Mongo
Redis
Kafka
Code Repository
CI/CD
Helm Mgmt
INDUSTRY PLATFORM
DIGITAL ENABLEMENT FABRIC AUTOMATION FABRIC
PROCESSES BOTSRPAAPIS MICROSERVICESCONTAINERANALYTICS COGNITIVE BAM
GOVERNANCE FABRIC
USER & ENTITLEMENT
DISCOVER DATA || DATA CATALOG & GLOSSARY | POLICIES
DIGITAL INTEGRATION FABRIC
DSE Event Stream Processor Rapid Data Access
DATA & INSIGHTS FABRIC
DEVOPS FOUNDATION
Change Data Capture Service Social Media Adaptors
Code Generator
Dependency Dashboard Incident Triage
Log Analyzer Sec DevOps
Transaction Profiler
TRANSACTION MGMT
DATA VIRTUALIZATION CONTENTDECISIONSJOBS & SCHEDULING
Reference Architecture of Banking Platform

19. API & Technical Overview
24

20. A comprehensive API strategy begins by defining
business objectives
API Business
Goals
Grow revenue through new channels
Increase brand recognition
Speed integration with partners
Improve customer satisfaction
Accelerate delivery of mobile apps
APIs Business Models1
27

21. Consider new business models
Augmenting products to generate data
Digitizing assets
Combining data within and across industries
Trading data
Codifying a distinctive service capability
APIs Business Models1
28

22. API Lifecycle Management
IBM API Lifecycle & Governance Reference Model
API Strategy & Planning API Design API Build & Transition API Management
API Ownership
API Funding
API Sales Management (incl. market to
target definition)
API Prioritization
Candidate API Identification (incl.
monetization option)
API Marketing & Communications
Business Case & Approval
API Architecture Design
API Specification
Define SLAs
API Technical Environment Design
API Development
API Integration
API Certification
API Environment Enablement
API Publish & Deploy
API Versioning
Enable API Support (incl. Training)
API Documentation
API Business Models (incl. monetization
strategy)
API Business Partners & Vendors Selection
& Management
Assess Regulatory Compliance
API Plans & Policies Management
API Catalog Management
API Community & Support
API Metering & Billing
SLA Monitoring
API Analytics
API Security and Infrastructure
Management & Operation
API Business Value Monitoring
API Security Design
API Technical Design
API Governance
API Governance Structure &
Foundational Processes
API Principles & Standards API Metrics Infrastructure & Tools Skills
26

23. How we identify and prioritize the APIs?
Stakeholder Map Empathy Map
Scenario Map Story Map
The objective of each API has to be related to a set
business initiatives aligned with the strategic
imperatives of the bank.
The best way to be able to identify potential APIs is by
using the Design Thinking methodology, where
“Customer Journeys” are built for each initiative where
there is an impacted "person". This design thinking
workshops are oriented to define MVP scenarios and the
set of APIs required for them.
Customer Journey
APIs Preliminary Catalogue2
29

24. How much governance is necessary?APIs Life Cycle & Governance3
For APIs, the focus is on
speed and time to
market. A lightweight
governance model is
required.
Plan the governance
model for APIs according
to what level of data it
exposes and the type of
APIs - whether it is
public or private (partner
and internal).
Partner
• API identification
• Versioning plan
• Security
• Privacy
• Monetization - maybe
• Entitlement enforcement soft
or hard
• Communication*
• Measurements*
Internal
• Less concern on:
− API identification
− Versioning plan
− Security
• Monetization - chargeback
• Entitlement enforcement
usually soft
• Communication*
• Measurements*
Public
• API identification
• Versioning plan
• Security
• Privacy
• Monetization
• Entitlement enforcement
more often hard
• Communication*
• Measurements*
* = always required
34

25. API Governance Process
* API reuse a prioritization criteria as well as prerequisite check for identification of new API
Legend:
Security
Data privacy
APISpecificationBuildandPublishMonitorAPIIdentification
Work Ahead
Discovery APIs
Platform
API-fication
API Proposals –
New or Change or
Retire
Project Pipeline
APIs
Business-IT Joint
API Design
Council
Funding Decision
Ownership
Decision
* Candidate API
Catalog
API Release
Planning / Spring
Planning
Demand Driven
Execution
Work Ahead
Execution
API Specifications
and Design
API Technical
Architecture
Board
Review Report
API Build /
Change / Retire
Deploy for Test Test API
API Test Results
(Production
Readiness)
API Product
Release
Management
Publish
(New/Change) /
Retire Decision
Updated
Published API
Catalog
Monitor & Manage
API
API Analytics
Approve to Plan
Approve to Build
Approve to Publish
APIs Life Cycle & Governance3
35

26. Defining API CoE – for API Governance
API Center of Excellence (CoE): a key element to drive API adoption and enablement of required capabilities
APIDomain
1
APIDesign
Team
API Domain
Business Owner APIDesign
Team
API Business
Owner
API Sales
Manager
API Tech.
Owner
API Architect
APIDomain
2
APIDesign
Team
API Domain
Business Owner
APIDesign
Team
API Business
Owner
API Sales
Manager
API Tech.
Owner
API Architect
API Dev.
Teams
API
QA
API
Mgmt.
API Center Of Excellence (CoE)
API Leadership Team API Advisory Team (SMEs) API Design Authority
Executive Steering Committee (ESC)
Innovation SVP COO
Digital Strategy Director CIO
Project
Management
Office (PMO)
Business Executives
Bank SVP
Executive Sponsor (SVP)
Information
Governance
Committee
APIs Life Cycle & Governance3
36

27. API Days – Banking on the
platform economy
The Next Wave of
Disruption in Banking
1
Bharat Bhushan
CTO – Banking & Financial Markets Europe
@_bharat_