Retail-BCG Briefing

API Solutions

January2018

BN060

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Table of Contents 1 Background.......................................................................................................................................3

2 APIATM............................................................................................................................................4

2.1 Paradigmshift.................................................................................................................................................4 2.2 Newinfrastructure..........................................................................................................................................4 2.2.1 On-Us..........................................................................................................................................................4 2.2.2 Traditionalschemesolution.......................................................................................................................5

3 Conclusion........................................................................................................................................8

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1 Background Technology in the banking sector tends to demand own systems, massive investment and complex

infrastructuresolutions.

Withchangesintechnologywenowseebreakthroughswhichallowtechnologytoconnect,beconnected

anddeployedsimply,easierandmoreeffectively.

Thispaperisdesignedtooutlinetheoptionsavailabletothebanks.

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2 API ATM

2.1 Paradigmshift

A newdimension has come to the banking technologymarket, driven by technology advances and new

openplatformapproaches.

Withtheadvancementoftheinternet,APIshavecometotheforeasthenewcommunicationplatformfor

devices.Weseethiswithsmartphones,tabletsandcomputers.

IndeedeachcountryistakingadifferentapproachtoAPIsolution;somearetakingapragmaticapproach

and regulators are promoting ‘Open Banking’ API solutions as seen in the UK,

https://www.openbanking.org.uk.Thishasbenefitsas itencouragesallbanks tocommunicateona level

playing field allowing customers tomove easily from bank to bank and so is a more customer friendly

solution.

Whereasinothercountriesbanksandtechnologycompaniesareploughingtheirownfurrow,sotospeak,

withtheirownbespokesolutions.Thisisnotascustomerfriendlyasonecouldhopebutatleastadvances

infrastructures.

Ifwe look at the self service devicemarket thenwe seeAPIs transforming themarket by allowing new

innovativesolutionswithouttheneedforintensiveandexpensiveintegrationprojects.

2.2 Newinfrastructure

WiththeadvancesinAPIandtechnologywecannowseenewsolutionscomingtothemarketwhichbring

anewdimensionto‘On-Us’andopenbankingsolutions.

2.2.1 On-Us

Forexamplean ‘On-Us’ solution couldallow smartphones/tablets to talk to the cashunit toprovide the

functionalityasdefinedinthebanksApporonlineservices.

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HerethedevicescanprovideBankorRetailfunctionalityinlinewiththeApp.Componentsinclude:

1. Drivingdevicea. POSunitasseeninsmallretailb. Smartphoneasprovidedbytheclientc. Tabletasprovidedbythesiteorclientd. AnyAppbaseddevicewithconnectiontotheinternet

2. Cashunita. Purecashdispenserb. Cashrecyclingunitfordepositsc. Dropunitforchequesorotherpaperbasedvalueitems

3. Applicationa. Asdefinedbytheretailerb. Asdefinedbythebank

Anycombinationoftheabovecanbedeployedtodayforuseinan‘On-Us’closedloopenvironment.

2.2.2 Traditionalschemesolution

Fullopenarchitectureasseenbelow,connectingtothetraditionalbanksystemsorcardnetworks.

TerminalHandler

TerminalManagementsystem

WebServicesBank

HostSecurityModule(HSM)

CloudbasedOn-Usenvironment

Confidential

AdvancedATMApplication

Cash Devices

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The above solution then allows the bank to offer traditional solutions as a cash dispenser or even cash

deposit/recyclingsolution.

The devices that can be deployed can be traditional ATMs however we would encourage some new

conceptssuchasacashunitconnectingtotheclientssmartphoneortabletallowingthefunctionalitytobe

alignedwiththebankinternetormobileapplication.

OneexampleisseenbelowwhereatraditionalPOSunitcanconnecttoacashdepositanddispensingunit.

TerminalHandler

TerminalManagementsystem

WebServicesBank

TransactionAuthorisationSchemes

HostSecurityModule(HSM)

Cloudbased‘On-Us’andSchemesolution

Confidential

AdvancedATMApplication

Cash device

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Inaretailenvironmentthiscouldthenlooklike:

Thekeyelementsofthesolutioninclude:

1. App

2. Cashunit

a. Dispenser

b. Deposit

c. Recycler

3. Masterunit

a. POSterminal

b. Smartphone

c. Tablet

d. Other

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3 Conclusion Thekeypointhereisthatdevicescanbedeployedwhichallowthebankstomeettheirtraditionalbranch

servicesbutinacloudbasedsolution.

We believe this can relieve pressure on the banks and allow solutions to be deployed effectively and

withoutoverheadswhileprovidingbranchsolutions.

Bankscanconsiderdeployingdedicated‘On-Us’solutionsorthesecouldalsobecombinedwithtraditional

paymentschemesifrequired.

Thescopeandlimitsarepurelydowntothetransactionalsetrequiredtobedeployed.

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Retail-BCG

Retail-BCG specialise in the payments sector bringing innovation and expertise to the complex

areasofpaymentsandpaymentdevices suchasATMs throughour intimateknowledgeof card

schemes, regulations and operational models. Within our group we also operate an ATM

outsourcingandBPOmanagedserviceforourclients.Webringtomarketnewtechnology,new

providersandnewsolutionswhichreduceoperatingcostsandenhanceservicecapability.