The business of banking and payments

 What does a bank do? From the perspective of a consumer of business here are the core functions:-Offers consumers banking services around their day to day needs of payroll, paying bills, cash requirements, mortgages, deposits and managing wealth.-Offers businesses a way to receive money from customers and pay their suppliers, loans to fund their business, handle domestic and international  payments Between themselves, they offer loan syndication, securitization, investments , stocks and bonds.A common theme is the use of information...

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Barriers to Open Banking

 As the banking industry is wrestles with  the twin challenges of  new customer acquisition and operational costs they are aligning some of their spend on digital transformation to Open Banking driven by the requirement of giving TPP or third party providers access to customer payments data.This has created some additional barriers around competition and innovation. Lets consider these in more detail:Competition:-All jurisdictions with PSD2 have rules around which accounts should be accessible by TPPs. Many banks have even published...

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Why should banks care about ISO20022?

 Consider some of this data:-Total transition costs for migration to ISO 20022 payment message standard cost the SEPA $9 billion as per a 2017 study.-Payments Canada expects a migration from checks will save the Canadian economy $4.5 billion.This is good for the economy and society as a whole but I am a bank running for profit so why should I care? I have a system that works fine, the inefficiencies and delays in my current system is to my benefit...

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What is a Data Fabric?

 We are all aware that banks today are dealing with multiple data sources. Each of these data sources or end points  have to be brought into a central warehouse to run analytics on.  All this data movement requires integration capabilities and further the need to manage for security , the information about the data or metadata.Data fabric is a middle layer that sits on top these end points and the connections architecture . You can think of this as a logical or virtual layer. You then build services to connect to the data fabric. ...

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How will payments be regulated?

 With the success of Chinese and UK based fintech and the changes in the USA allowing the likes of Amazon to offer lending to small business, fintechs are a well established member of the market infrastructure. As the volumes they handle rises the questions is what will regulators do?On the one hand they want to encourage competition, enable the underserved and have worked to ensure data collections and sharing is regulated. Now that these goals have been met, the challenge is what to do with the new monopolies being created in fintech.Witness...

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What is a Data Repository

 In order to provide true value to the customer, banks need to understand them first. To understand customer behaviour with the goal of offering products/services relevant to them, the bank collects all details of the customer transactions. Then they study the data to see if any deeper understanding can be gleaned.To facilitate the process of getting insights banks use a collection of data bases called Data Repository   (aka data lake, data mart, data library, data archive). This repository stores the data sets on which analytics...

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The need for data integration

 In modern banking technology environment , the quest to get hold of data is a very complex exercise. First the data about the transaction has to be collected and there are rules on what to collect , how to collect and from where you are receiving this data. Then the need to transform the data into a form that can be ingested ,indexed and visualized by the product developers. After this, the data has to be moved to analytical platforms to slice and dice the data in a way that will make sense to the business teams. Finally the data has to be...

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