transforming payments for corporate banking with apis · 2018-07-06 · transforming payments for...
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Transforming Payments for Corporate Banking with APIs
Patrick Ikhifa, Sr Director, Customer Success
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Safe harbor statement
The information in this presentation is confidential and proprietary to MuleSoft and may not bedisclosed without the permission of MuleSoft. This presentation is not subject to your licenseagreement or any other service or subscription agreement with MuleSoft. MuleSoft has noobligation to pursue any course of business outlined in this document or any related presentation,or to develop or release any functionality mentioned therein. This document, or any relatedpresentation and MuleSoft's strategy and possible future developments, products and or platformsdirections and functionality are all subject to change and may be changed by MuleSoft at any timefor any reason without notice. The information on this document is not a commitment, promise orlegal obligation to deliver any material, code or functionality. This document is provided without awarranty of any kind, either express or implied, including but not limited to, the implied warrantiesof merchantability, fitness for a particular purpose, or non-infringement. This document is forinformational purposes and may not be incorporated into a contract. MuleSoft assumes noresponsibility for errors or omissions in this document, except if such damages were caused byMuleSoft intentionally or grossly negligent.
All forward-looking statements are subject to various risks and uncertainties that could cause actualresults to differ materially from expectations. Readers are cautioned not to place undue reliance onthese forward-looking statements, which speak only as of their dates, and they should not be reliedupon in making purchasing decisions.
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Speakers
Patrick IkhifaSr Director, Customer SuccessMuleSoft
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This isn’t just happening in banking...
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Disruption in financial services
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The traditional organization
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From a Traditional Organization…Product- or channel-centric mindset
Channels
Processesacross
journey
Data & systems
Line of Business /Product
Organization
Line of Business /Product
Line of Business /Product
● Organizational silos
● Duplicative systems and data
● Separate processes by product and/or by channel
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Digital Channels
Data & Security
Lines of Business
IT
Operations & Support
Delivers applications/SORs + data for the stakeholders across the value chain above
Marketing Partners
An open banking platform where standards, access and security can be controlled while innovation is pushed to the edges
Multiple stakeholders will have their own initiatives for digital transformation.
How do you align everyone?
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Silos cause value chains to break down
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Digital Platform
A digital platform enables sharing of APIs across silo walls
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From a Traditional Organization…Product-centric mindset
…To a Digital OrganizationUnified, capability-centric organization
Channels
Processesacross
journey
Data & systems
Line of Business /Product
Organization
Line of Business /Product
Line of Business /Product
Channel A
SupportTransactOnboard ProtectAcquire
System & Data Layer
Channel B Channel C Channel D Channel E
Unified organization
Integrated channels
Capabilities-as-a-Service
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RISE OF NON-CASH PAYMENTS
INFRASTRUCTURE CHANGES
CUSTOMER EXPECTATIONS
NEW PAYMENTS ECOSYSTEMS
REGULATIONS
Payments: market influences
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Externally, a new payment ecosystem is emerging where banks can play central role
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Sco
pe
of
serv
ices
Services beyond traditional banking
Other banking services
Broader set of payment services
Minimum neededpayment services
No business model impact
Monetize TPP’s requests and new services
Utilize TPP role
Grow into a digital platform
player
Comply onlyTr
ansf
orm
atio
nal
stra
tegy
Just comply or explore opportunity to evolve new business models?
Integrate FinTechs into YOUR value chain
Think of yourself as core capabilities, but will require:
• Reuse/consistency across the organization
• Changes how you work with FinTechs to augment your platform
Business model options
Banks will need to look at strategic repositioning options and decide a future course of action
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Integration enables automation and a bridge to new business models
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Business Process Automation
Business Process Optimization (BPO)
i.e., BPM
Business Process Integration (BPI)
What it is: ● Transfer of responsibilities from human to technology
● Elimination of redundant components in a process
● Reusing optimized components across multiple processes
● Transfer of responsibilities from human to technology
● Transfer of responsibilities from human to technology
● Elimination of redundant components in a process
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Why is this important? Real-life examples
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Business Process Automation
Business Process Optimization (BPO)
Business Process Integration (BPI)
What it is: Manual money transfer form digitized into an online form
Eliminating steps for the end user via technology & data integration
● Payee identification● Biometrics authentication● Pricing engine
● Enterprise standard for authentication and signatures for all processes
● Standard process across company’s channels
● Create new revenue streams by providing as a service to other intermediaries, partners, etc.
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What do you need to integrate to the new business model
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Business process automation
Operating model transformation
End goal:
Business Process Automation
Business Process Optimization (BPO)
Business Process Integration (BPI)
What you need:
● Access to core system data and functionality
● Discoverability of optimized workflows across multiple processes for reuse
● Visibility into code
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Payments use cases: where this can be applied
• Non-commerce payments (e.g., paying rent, etc.)
• Account to account transfers
• Contributions or gifts
• E-commerce payments
• Urgent bill payments
• Payroll (e.g. ACH)
• Payments for disputes
• Payments for chargebacks
• Just in time supplier payments
• Short-term loans servicing
• Payments for disaster recovery
• Tax payments
• Payments for any subsidies / welfare measures
P2P / C2C C2B B2C B2B C2G / G2C
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Payments Moving into an
Ecosystem
Market maturity in payments
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Payments as a Commodity
Payments as a Differentiator
Payments as Information
• Payments is not a core service • Processing outsourced
• Payments is a strategic focus
• Differentiation from seamless payments
• Data lakes leveraged for consumer analysis
• Innovation via partnerships & technology investments
• Standardization of some payment services
Current state Next step Future statePast state
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New ecosystems present 2 schemes for real-time payments
Community Schemes Private Schemes
• Supported by financial regulators
• Usually focused on 24/7, real-time account-to-account payment infrastructure
• Enable universality and reachability to all beneficiaries, resulting in greater adoption
• Based on networks of payment service providers (PSPs)
• Build on existing payment scheme
• Provide solutions to market quickly
Real-time payments are increasingly becoming table stakes globally for banks and we see two schemes for them:
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Example: Disruption in Payments
New Paradigm FinTechs Entrants
Processing Clearing SettlementInitiation Authentication AcquiringValue Chain
Front End Experience Back End Digitization
Status Quo
Retail BanksCredit Card Issuers Retail Banks
First Data, Fiserv, ACI Worldwide
Other processors
Payment Card Networks (e.g., Visa, Mastercard, American Express, etc.), SWIFT,
ACH
Apple Pay, Samsung Pay, Google Wallet, Venmo, MX, Yodlee, Zellepay
PayPal, Bitcoin, etc.
Square, Stripe, etc. Ripple, etc.
Currency Cloud, Volante, Gresham
Tech/C24
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Example: Disruption in Cash Management
Clearing & SettlementProduct ProcessingChannel &
OriginationServicing & Reporting BillingProduct
ManagementOn-
boarding
AR & AP Products
Investment product
Entitlements Set-up
Entity Management
* Select aspects only. Full payments capabilities not included here.
Omni-channel
Collections (AR)
Notional pooling
Physical pooling
(Sweeps, ZBA)Tax
Handling
Interest Calculation
Virtual Account(PoBo/RoBo) Netting Flexible billingCash
Forecasting
Risk Management
Investment Management
New Paradigm FinTechs Entrants
Status Quo
Commercial Banks
Experian, Yaypay, Tallysticks, NvoicePay, Tripalti, etc
Kyriba, Experian, Yaypay, Tallysticks, NvoicePay,
Tripalti, etc
Commercial Banks,TPP
Traxpay, Earthport, Goprocess
Front End ExperienceFront End Experience Back End Digitization
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You have thisIT has this but needs to
make sense of it Business wants this
The open banking platform is made up of reusable building blocks
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MuleSoft’s 3-step transformation approach
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Externalize core system data & functionality into foundational building blocks
Orchestrate processes & package them into composite applications that deliver meaningful experiences
Expose composite applications as a service, making them discoverable and consumable across channels
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The API-led connectivity Approach: begin with mock service
Create an API and turn on the Mock Service
ProcessAPIsCreate Entity
Profile API
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• No system talks directly to any other system
• API defined using your terminology
• Embedded governance & security
• Minimizes disruption caused by new releases
SystemAPIs
Mythical EntityCustomer Identifier
API
ProcessAPIsCreate Entity
Profile API
Records API
1. Externalize core system data & functionality to create an Insulation Layer
Data Management
Line of Business 23
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SystemAPIs
ProcessAPIs
Mythical EntityCustomer Identifier
APIRecords
API
2. Orchestrate processes and drive reuse
Data Management
Line of Business
Create Entity Profile API
Get Entity Profile API
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3. Expose services & deliver for experiences
SystemAPIs
ProcessAPIs
ExperienceAPIs
Mythical Customer
Customer Identifier
APIRecords
API
Get Entity Profile API
Data Management
Line of Business
Mythical Entitlements
Authenticate Access API
Identity & Access API
Suspicious Activities API
Information Security Fraud / AML
xAPI
Customer on Mobile
xAPI
Partner Portal
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IT / Digital Channels
Data Management
Information Security
Master Data Management
Identity & Access
Management
System APIs
Process APIs
Experience APIs
Mobile Desktop Partner Portal
Display Payment Confirmation API
Display A/P Balance API
Authenticate Access
API
Get Entity Profile
API
Update A/P Balance API
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Process Payment
API
Initiate Payment
API
Systems
Products / Functions
Divisions
Customer Identifier
API
Profile API
Accounts API
A/P API
Payments API Fraud
Risks API
G/L Postings
API
Checking/Savings
Lines of Business
Cash Management
ProductsPayments
DDA AP/AR Payment Processing
Note: The above is an illustrative example / for discussion purposes
Creating the composable enterprise with APIs
Fraud / AML Accounting
Fraud Monitoring
General Ledger
Support Functions
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Bank potential cash management API catalogue focuses on bank-to-external stakeholder interactions
Client a/c management
servicesCollection services
Disbursement services
Funding / Liquidity services
External API
Enabling interaction
between bank and external
world
Account management APIsEnable clients to manage their account services ✓Information APIsAccess to relevant cash management related data / information
✓ ✓ ✓ ✓Transaction APIsFinancial implication based APIs that are exposed to client representatives
✓ ✓Internal
API
Enabling internal
payments processing capabilities
Account management APIsenable internal users to manage customer accounts
✓Information APIsenable internal users to fetch cash management related information for internal consumption
✓ ✓Transaction APIsFinancial implication based APIs for internal processing
✓ ✓
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Note: Bank’s maturity and its customer engagement strategy will elevate few of the internal API to external space
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How do you then create new revenue streams?
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Leverage your channels
Mobile Desktop
Physical Locations Devices Call Centers
Partner SitesTablet
Leverage the open banking platform to cut across channels and create new revenue streams
A partner’s customer portal
Your bank
A subsidiary bank
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Capabilities you need to succeed
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CONNECTIVITY
Connect to a wide range of systems that participate in payment ecosystems such as fintechs as well as
legacy core banking systems
REAL-TIME DATA DELIVERY & PROCESSING
Drive event-based data processing on a highly performant platform without requiring you
to abandon legacy systems
SECURITY & RISK MANAGEMENT
Secure all transactions, apply
appropriate authorization, and centrally manage participation in
payments processes
CHANGE MANAGEMENT
OPERATIONAL ALIGNMENT
Decouple your applications and data
with APIs to easily swap or add new
systems, regardless of whether they’re in the cloud or on-premises
Capture transaction data and grant access to stakeholders and support functions for
liquidity management, AML, fraud prevention,
etc.
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The application network platform
INTENTIONAL SELF-SERVICE
New teams enabled to innovate via
intentional access to the right tools with
relevant assets
SECURE BY DESIGN
Secure by default, with options to add additional policies, edge gateways and
tokenization
ACTIONABLE VISIBILITY
Holistic visibility into all deployments
to proactively prevent and quickly
resolve issues
One product to learn with hundreds of pre-built assets to accelerate time to
build APIs, integration & tests
SPEED OF DELIVERY
MuleSoft’s Anypoint Platform
Built on open technologies, and resilient to old and new deployment architectures and
trends
FUTURE-PROOF ARCHITECTURE
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Technology is not enough: a new operating model
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Central IT
LoBs
Innovation teams
Pull from APILibrary
Project 2
APIsTemplates
Exchange
Project 1
Is there an asset?
Should we create one?
Process
Full API lifecycle
Enterprise-grade connectivity
Visible secured & governed by design
Application Network
Technology
C4E cross functional team
People
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1 Design Center, 1 Mgmt Center, 1 Runtime
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Anypoint Platform
On-premises& private cloud
Hybrid Hostedby MuleSoft
Cloud service providers
DesignAnypoint Design Center
ScaleRuntime services
RunMule
ManageAnypoint Management Center
EngageAnypoint Exchange
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Head-to-head comparison vs. legacy middleware
Setup
5 4
Implement
4
Design Deploy
2 2 1 8 hours with MuleSoft
26 hours4
1.5
Unit test Manage & Monitor
Comparison done by a leading financial services firm in partnership with a major system integrator
0.5
1
4 5
38%
26 hours
Decreases development time by:
for a medium complexity
for a high complexity
for a low complexity 47% 67%
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Thank You!
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Connectivity Overview
● The new T24 Inbound & Outbound Connectors are a Java-based connector that 1) retrieves and safely delivers integration events from T24 into Mule, and 2) push messages to T24 containing T24 data changes or other inquiries, respectively.
● These connectors have been reviewed and certified by MuleSoft.
Connectivity Overview
● The Volante Connector enables seamless integration of complex message flows to implement the complex business logic necessary to integrate financial applications (payments systems, treasury systems, trading platforms, etc.), resources and networks using standard or proprietary message formats.
Connectivity Overview
● C24 specializes in standards-based messaging and integration solutions aimed at the wholesale financial services (FS) markets, and supports for over 40 industry standards including SWIFT, ISO 20022, SEPA, FpML and FIX.
● Operations available within the connector are: parse, validate, transform, transform advanced, marshal, and convert
Connectivity Overview
● The CardConnect Payment Gateway provides access to most North American payment processors, including First Data, Chase Paymentech, TSYS, Vantiv, Global Payments and others.
● Via the REST API defined in this RAML, payment transactions can be authorized, captured, refunded and voided as needed.
Catalyst Accelerator for Banking -
Process API Implementation Templates● Aggregate accounts - aggregates accounts across multiple core banking systems. It requires orchestration
logic that integrates multiple internal and external APIs and provides data via a single point of query.
● Initiate payment - lets a shopper pay directly from his/her bank account. Users do not give a bank login details to a merchant, or, vice versa, the merchant user’s login details to the bank account; users simply give permission to the merchant to execute payments on the user’s behalf via the bank account.
● Process payment - illustrates how payments are made within Catalyst Accelerator for Banking, which also includes SMS notifications that are sent when the transaction is completed.
Available MuleSoft payments solutions
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Use cases supported by MuleSoft’s Catalyst Accelerator for Banking:
● Customer onboarding● Customer
authentication● External account
aggregation ● Account information
(PSD2 AISP)● Payment initiation
(PSD2 PISP)
Available MuleSoft payments solutions