Open Banking. How banks can meet the challenge of the changing environment of financial services?
The revised Payment Service Directive (PDS2) will significantly change the working environment of banks. PSD2 will mandate banks and other account-holding Payment Service Providers (PSPs) to grant secure access to their customer accounts for third party providers (TPPs) if the account holders consent to it. This ‘Access to Account’ (XS2A) rule of PSD2 will oblige banks to develop Application Programming Interfaces (APIs) for their core banking solutions in order to enable this access. Using these secure gateways TPPs may either provide payment initiation services (Payment Initiation Service Providers – PISPs), without using card networks (eg.Visa / Mastercard) or provide personal finance management services aggregating account information from clients’ accounts (Account Information Service Providers – AISPs). All these changes will allow a new way of cooperation between banks and technology- driven financial service providers - Open Banking.
Open Banking will disrupt existing businesses and make way to new ones. But who will be successful in this new world? Is it enough just to act in compliance with PSD2 rules, or is it worth developing a new ecosystem of PSPs and TPPs? How should the IT systems of banks be developed to meet these challenges?
These are the questions we plan to answer at the 5th Annual Retail Banking Forum in Berlin on 1st and 2nd June, 2017 (https://glceurope.com/event/5th-annual-retail-banking-forum-forum-2/).
Join the event and see our presentation!
Upgrading our IFRS 9 study and joining Risk EMEA 2017
Online Business Technologies has launched a joint survey with the Center for Financial Professionals in November 2016 to screen the IFRS 9 impairment approach of banks using Standard Approach, and identify widely used simplification strategies that are allowed by the Standard. The key findings of the survey were summarized in a study ‘Assessing the Preparedness of Financial Institutions using Standard Approach for IFRS 9’ available for free download from the website of CEFPRO:
These findings were also discussed with members of the banking community at a breakfast briefing during the IFRS 9 Forum organized by CEFPRO on the 2nd of March in London. Based on the feedback received here, we decided to upgrade the study in order to reveal what has changed in recent months.
The upgrading process will also be managed by CEFPRO, and the results will be published at the 6th Annual Banking Risk & Regulation Summit in London on 9-10 May, 2017 ; see https://www.cefpro.com/forthcoming-events/risk-emea/. Join the event and see the results!
IFRS 9 survey and forum
Our company has conducted a joint survey with the Center for Financial Professionals (www.cefpro.com) to screen the IFRS 9 impairment approach of banks using Standard Approach, and identify widely used simplification strategies allowed by the standard. The survey intended to find answers to such exciting questions as : what is the status of IFRS 9 implementation projects throughout Europe, what are the most popular simplification techniques used by financial institutions, and how do banks plan to develop their IT systems in order to meet the challenge of IFRS 9 implementation. The survey was filled in by 146 respondents, and the final report on the key findings is available for free download on the website of CEFPRO:
Our company presented the results at the IFRS 9 Forum organized by CEFPRO in London on 1st and 2nd of March, 2016.
Are you ready for the implementation of IFRS 9?
It was the biggest question of the CEFPRO – IFRS 9 Impairment & Implementation Conference held in London on September 20 and 21. But should banks care much about it? The answer is a definite YES.
The implementation of the IFRS 9 standard is not merely a headache for the accounting departments. Its business impact is inevitable, as the biggest consulting firms expect 25 – 50% increase in the impairment of banks, having immediate negative effect on the P&L. The implementation also requires the rethinking of risk management methods as IFRS 9 impairment requires envisaging future losses (e.g. calculating with impacts of macroeconomic changes), rather than making projections based on the historical performance of portfolios, as banks have been doing it. This rethinking requires large projects (with 11 – 25 FTEs) that have to solve product classification, governance, process management & IT issues. Banks expect to have possibly strategic but even in the best case tactical (major) developments in their information systems. The total cost of these changes may exceed 30 M GBP according to expectations of the largest banks. And all issues should be settled by 01.01.2018. Really challenging.
Fortunately this challenge need not be solved by the banks alone! In the line of valuable speakers we also had a presentation at this conference about the IT challenges of implementing IFRS 9. In this presentation we outlined some areas of IFRS 9 implementations where banks may have ‘ready solutions’ to boost the IT implementation, gaining valuable project time and solving some of the toughest modelling issues under IFRS 9. Where are these areas? To see the answer check out our IFRS concept: