Accenture Banking Blog

In my previous posts, I covered the potential that Open Banking and treasury application programming interfaces (APIs) offer both banks and their corporate customers and gave examples of some leading industry players.

In this post, I’d like to highlight some key observations of how these leaders are navigating the first wave of corporate banking and treasury APIs, and what other banks can take away from their experiences.

1. Large incumbent banks are following a two-pronged strategy. Banking as a platform (suitable for mid-markets) and banking as a service (suitable for mid-markets and corporates).

Key takeaways: Banks should extend existing host-to-host offerings into APIs, while simultaneously strengthening their direct-to-market digital channel offerings. They need to offer flexibility and choice around channel and connectivity options and pricing models for their corporate clients.

2. Large incumbent banks position their treasury offerings as business products and services—not as APIs. Banks such as Citi, J.P. Morgan and Commerzbank already offer virtual accounts and cash management products to deliver the benefits of treasury rationalization.

Key takeaways: Banks need to treat APIs as a business product, aligned with customer demands and expectations, and ensure that it addresses a business need. They should focus both on creating a brand identity for their treasury API product, as well as extend the ecosystem through partnerships.

3. Large incumbent banks have focused on payment and account API products in the first wave of commercial banking. Citibank, DBS, Bank of America, Wells Fargo, J.P. Morgan and OCBC Bank all offer the following API products: payment initiation, payment status, account balance, account transactions, and authentication and authorization.

Key takeaways: European API standards (PSD2, UK Open Banking, STET) are a good starting point for designing these APIs. Banks that choose to offer additional APIs should prioritise and align them to their overall business strategy and direction in commercial banking.

4. Leading enterprise resource planning and treasury management system platforms are promising to offer a larger ecosystem of financial services. Oracle, SAP and Kyriba are looking to establish their own networks with pre-built connectivity into banks and third parties, allowing them to offer one-stop-shop services.

Key takeaways: It is important for banks to have readily available connections into the SAP, Oracle and Kyriba ecosystems, so they can serve the customers choosing the convenience of one-stop-shop services.

5. Cloud-based accounting platforms are emerging as the new competition. Firms such as Xero, Sage, and Freshbooks are offering integrated cash management, invoicing and payment services to small- and medium-sized enterprises and, increasingly, mid-markets.

Key takeaways: Banks should investigate partnering with cloud-based accounting firms to protect against disruption. In order to increase market reach, they should consider connecting to multiple cloud accounting platforms through APIs.

These are just a few of the insights we gained while helping our global clients navigate their Open Banking and treasury API journeys. Please feel free to contact me with questions and feedback.

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