Open Banking PTBR

7 axway.com Enabling banks to explore new business models Whether GAMFA giants can topple banks or take a large chunk of their market share will depend on how willing a bank is to adapt and experiment with new business models. "Right now, the chain of value is 100% to banks, but that will change in the future," says Pütz. "Banks will have to reinvent themselves, they will have to change their culture, and their revenue streams. The GAMFA giants have so much money and clout. Each customer of a bank is already probably a customer of Amazon. People already have trust in Amazon, so banks can't say that trust is their competitive advantage." Pütz says one of the advantages of the common open banking platform approach is that banks can work together to identify non-PSD2 API opportunities. And by leveraging the demand side, LUXHUB can introduce strategic fintech API consumers to a pool of banks to discuss new products and business partnerships. Pütz gives the example of a fintech with a very specialized financial services offering. Via the LUXHUB platform, banks could offer a white label version of the fintech's service via their shared LUXHUB APIs. "That is one revenue stream for banks in the future, in my opinion," suggests Pütz. Built with a security focus, using Axway's API management solution LUXHUB is built in a managed service environment, hosted in Luxembourg, with no intention of using cloud service providers to hold their data. LUXHUB has an accredited tier-4 data center environment. Using Axway AMPLIFY API Management, LUXHUB is able to document APIs in the Open API Initiative specification, making it easier for third-party developers to understand how the API functions. LUXHUB has done the work of ensuring the API definition matches PSD2, STET, and Berlin-Group standards so they are transferable to all European jurisdictions, and will be closely watching the rollout of any other national legislation that may require additional elements to be added to their common APIs. AMPLIFY API Management has been an essential component in enabling LUXHUB to build their platform and is similar to how banks with multiple brands and individual companies need to be able to harness separate lines of business into a common API architecture. "We use the API gateway and the embedded analytics to create our own ecosystem of products, right out of the box," said Pütz. However, to achieve some of the additional capabilities and secure connections with individual banks, Pütz says LUXHUB had to create additional components, but that this is part of their unique value proposition. A new banking paradigm The world of open banking continues to shift quickly. Incumbents that appeared to have lost the battle can change strategies and win back a place at the table. One example of that occurring is in the U.S., where PayPal's peer-to-peer transfer payment structure looked like owning the market. Banks worked in a co-opetition model last year to reinvigorate Zelle, their peer-to-peer payments infrastructure. By October last year, Zelle (and the banks behind it) had reclaimed 83% of the market share. Could LUXHUB be another example of banks working together to fight against tech giants ubiquity? Perhaps Luxembourg is one of the most unlikely places to start, although their story is already one of leapfrogging attitudes and traditional mindsets. In 2015, Luxembourg was the only EU country to vote against the introduction of PSD2 regulations. Now they are the first country to be creating a new collaborative model that aims to invite the rest of European banks to their open banking platform.

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