Evolution in Action

Outlining its necessities, benefits and wider effects, Glen Fernandes Managing Director, Global Client Management at BNY Mellon tells MEA Finance how Open Banking will impact regional banking and economies

What key requirements do banks need to meet when aiming to provide Open Banking services?

Agility is the backbone of Open Banking. We are in a rapidly changing industry and markets landscape - from both a business and a technology perspective - where client needs, requirements and expectations change quickly. Clients expect data to be made available to them much faster, at a much more granular level, and to be delivered to them where they want to receive it, be that on our own front-end portals, via APIs, or to third parties. They want the data to be turned into insights. They want us to work with third parties and bring them the best of what the industry has to offer where we can combine our capabilities and data with theirs and with others. They want more seamless integration of data and capabilities to drive faster insights for a broader set of users.

To provide more personalised client experiences, products and services, means financial institutions must have the agility to innovate and be able to work with fintechs, while remaining focused on strong data management and architecture policies. Banks need to ensure that they comply with the applicable data laws and regulations where they operate, which include data privacy and security at the core. Robust technology authentication protocols, policies and risk mitigation to prevent or manage data leakages is paramount, as is the openness that banks have with customers on how data will be used and shared. At BNY Mellon, we deploy advanced AI and Machine Learning, to ensure we continually improving our ability to identify and manage any issues as they come up in real time.

Are Open Banking and API’s providing clear business growth benefits to banks when compared to times before their use?

Technology-driven innovation is redefining how the banking industry operates. Industries are beginning to converge, changing traditional services and creating new models. The oppor tunities t o reimagine the future of banking is boundless and Open Banking is exponentially speeding up innovation within the sector. Through APIs financial institutions have a more detailed real-time view of their customer enabling them to provide customised products and services in ways that were unheard of in the past, when organisations were focused on building a single solution that would cater to all clients.

Ke y to this is our ability to be agile, flexible and responsive to everchanging and growing complexity and sophistication of our clients’ needs in terms of new products, new capabilities and new services to clients. We know that not every client is the same, and we understand the agility they need to continue their growth strategies.

Our approach is innovation through collaboration. We believe in working with the best companies across the industry, which allows us to innovate faster. We introduced an open-architecture approach to our core operating model which provides the ability to collaborate and integrate with the relevant market players of choice: fintechs, traditional providers and clients. We operate a data- and client-centric platform that connects a full portfolio of capabilities and third-party collaborations. It is the aggregation of those capabilities and it’s delivering them in a unified, digital experience.

With the advent of Open Banking, BNY Mellon developed with Intellect Global Transaction Banking (iGTB) a solution with distinctly innovative features that is designed to maximise cash on hand whilst minimising borrowings, which is one of the most important elements for corporate treasurers. This solution provides a complete front to back liquidity management suite incorporating real time sweeps and pooling with highly flexible features to benefit individual treasurers’ requirements.

At the beginning of this year, BNY Mellon/Pershing announced the integration of Real Time Payments (RTP) into its NetXInvestor platform, an investor portal used by broker dealers and registered advisor firms. The RTP integration is giving these clients 24/7/365 on demand access and secure funds.

Will the enablement of Open Banking be the norm for regional banks by the end of 2023?

2023 will be the year where regional banks are poised for growth and transformation due to Open Banking. The growing significance of regional fintechs supports this. However, for Open

Banking to be successful there will need to be a proactive approach to risk and compliance. Governments in the region are starting to shape of the markets approach to risk and compliance with the new data and cybersecurity rules and regulations that are evolving.

Cen tral to our function is to safeguard our clients’ assets and data. Our focus and investment in resilience and recoverability is essential. The outcome of this discipline and the processes of continuous improvement that are associated with it include live dashboards operating as commandand-control centres, fed by APIs with source data centres, critical business applications, communications lines and processes that have taken us years of investment. And these dashboards that we use to run and control the business model that BNY Mellon is able to provide innovation and efficiency at scale for clients and other market participants. Our focus is on three main drivers of value: accelerating new product development, bolstering our own and our clients’ operational resiliency and efficiency, and enhancing the client experience. This open mindset has allowed us to participate in meaningful collaborations and strategic investments that ultimately help drive improvement across the industry.

Could the commonplace use of Open Banking and API’s bring additional new benefits to regional economies?

The impact of the global investment and focus on Open Banking on regional economies cannot be underestimated.