Banking-As-A-Service in Treasury Management Millicent Calinog, SVP Treasury Management API Product Manager

MN AFP

April 26, 2016

© 2016 Wells Fargo Bank, N.A. All rights reserved. For public use.

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Agenda

What is Banking-As-A-Service (BaaS)?

What are Application Programming Interfaces?

What does it mean for you and why should you care about BaaS and APIs in treasury management?

Banking-As-A-Service (BaaS): A new channel for you to access banking products and services

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BaaS: A new distribution channel

Allows you to Use JSON/REST standards and

receive banking services over the internet, i.e., from the cloud

Have real-time access to Wells Fargo data and functions for your use

Pick and choose which functions to use

Automate access to banking services

Banking from the cloud

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BaaS: A new distribution channel

Supplements – does not replace – existing channels

Branch ATM PC – Home banking

Portal – Online banking

Mobile banking

Banking as a service

Allows your systems to use treasury management services & data whenever, wherever you need, instead of making you come to us, e.g., sending us files, accessing sites, asking us for information

Can eliminate persons logging into banking portal to access bank services/data

Gives you more choices: use our services within your choice of UI, software, context, workflow, etc.

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How can you benefit from Banking-as-a-Service?

Validate bank account information of the recipient of your payment

Allow your back end systems to communicate directly with your banks’ back end systems

Receive bank data real-time

Capture a more current, up-to-the minute, cash position

Migrate away from batch processing

Increase customer engagement through existing mobile channels

Accept mobile payments from your customers through your mobile app

Implement a non-password method of authentication for your customers’ access to your digital channels

What is an API?

API

App

licat

ion

Prog

ram

min

g In

terf

ace

Banking-as-a-service

Real

-tim

e

Instructions

Developers

data

api perform

task

Channel

soft

war

e

Immediate

Resp

onse

System

Efficiencies

Release

Leve

rage

Port

al Services

Functionality

Imbed

send

users

Standards

deve

lopm

ent

documentation

acce

ss

Simple

Provide

REST / JSON

usef

ul

example

interface pow

erfu

l

SDK

expose

users

mobile

Communicate

tools

data

web

info

rmat

ion

SD

K

cons

ume

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Enables direct & real time communication between back-office systems e.g., corporate-to-bank or bank-to-cloud ERP – easier for you to:

Teach your IT and support Use Implement Receive enhancements

Set of programming instructions

Lets one software application ask another to perform a task or a series of tasks

Application programming interface (API)

Always on and performing real-time e.g., email vs. instant messaging

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API =

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Companies that use or provide APIs Google Uber

Netflix Salesforce.com

Enables unbundling products offerings

Customers can pick and choose which capabilities to use within their own business processes

Why Application programming interfaces (API)?

Companies can expose an API so others can use to design capabilities rather than developing themselves

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How APIs are used

Like a LEGO city, companies often build their product offering by combining products and services from a variety of other companies

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How APIs are used

API

API

API

API

API

LEGO and the LEGO logo are trademarks of the LEGO Group. ©2015 The LEGO Group. All rights reserved.

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How companies use APIs

Uber uses services from a variety of other companies via APIs

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Facebook, Google and PayPal each wrote a block of code which allows Uber to use a select portion of their product or service. API

Why should you care about BaaS and APIs?

API App

licat

ion

Prog

ram

min

g In

terf

ace

Banking-as-a-service Re

al-t

ime

Instructions

Developers

data

api perform

task

Channel

soft

war

e

Immediate

Resp

onse

System

Efficiencies

Release

Leve

rage

Port

al Services

Functionality

Imbed

send

users

Standards

deve

lopm

ent

documentation

acce

ss

Simple

Provide

REST / JSON

usef

ul

example

interface pow

erfu

l

SDK

expose

users

mobile

Communicate

tools

data

web

info

rmat

ion

SD

K

cons

ume

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How you can benefit from BaaS and treasury management APIs

Mitigate risk Automate treasury operations

Enhance customer experience

Improve customer service

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Automate treasury operations – today…

End of Day 1 End of Day 2

Bank Status Origination

Consolidated Payables File

Channel

Today, companies wait until the end of the day to send consolidated payables files that contain a batch of ACH payments that have been gathered throughout the day

Clearing House

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Automate treasury operations – tomorrow…

Using APIs, individual ACH payments can be sent over as they occur throughout the day. They are then batched by a bank and passed through to the necessary clearing network. This allows you to get payments off your desk and receive periodic status updates as the individual payment is processed.

End of Day 1 End of Day 2

Bank

Status

API

Bank

Origination

Status

API

Bank

Origination

API

Bank

Origination

Status

Clearing House

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Risk mitigation – validate your payees and their bank accounts

Credit Check

API Customer Name

XXXXXXXXXXX

Bank Account #

XXXXXXXXXXX

National Bank Account database Real

Time

Delayed Response

Social Security Number

XXXXXXXXXXX

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Improve your customer service

Customer Call Center Site or System

Online Banking Portal

*A bank can host and makes available in real-time thousands of images of paid items and invoices

Customer Call Center Site or System

API

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Increase customer engagement using your mobile app

Pay Using Your Bank

Welcome to Rancho Smith Mall!

Scan a Receipt

Latest Mall Offers

Store Map

Schedule an Appointment

Track Mall Loyalty Points API

API

API

API

API

API

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Now what?

Ask questions about what you learned in this session.

Think about your Treasury Operations today – what challenges that you are facing might be solved with real-time interaction with your bank? Talk to your Treasury Management Sales Consultant about TM challenges you are facing that might be solved by using APIs

Thank you!