Why are banks interested in your data?

 Why are banks interested in customer data? The answer is one word--Steve Jobs.On 29 June 2007 the iPhone was launched. Fast forward 15 years  and the reverberations of iPhone are still being felt. The pandemic has only accelerated these changes.Steve said: "A lot of times people don't know what they want until you show it to them"What did Steve do that was so revolutionary?He showed that a customer centric unified value proposition...

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Where is the action in retail payments?

 In the beginning there was gold  followed by cash. Then came the check. And then came technology where we are now.The best analogy to understand  the action in retail payments is that of a kitchen table where the transaction occurs. The table has 4 legs and the table top. The four legs together with the table top  in our kitchen table example are the basic requirements of creating a transaction.Customer:The  first leg...

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Embedded Finance and Payments

 We have seen a lot of exciting developments in the consumer space introducing payments as a way to enhance revenue and customer interaction. Starting with major tech players like Apple and Google offering wallets for paying merchants, Square added debit cards to its Cash App P2P platform, Uber used the Visa  rails to provide instant payments to its drivers to Shopify adding Stripe's payment processing capability for its merchants.These initiatives have led to revenue gains for all parties but more importantly taken away customers which...

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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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