transforming payments for corporate banking with apis · 2018-07-06 · transforming payments for...

All contents © MuleSoft Inc.

Transforming Payments for Corporate Banking with APIs

Patrick Ikhifa, Sr Director, Customer Success


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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.


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

5


The traditional organization

6

From a Traditional Organization…Product- or channel-centric mindset

Channels

Processesacross

journey

Data & systems

Line of Business /Product

Organization



● Organizational silos

● Duplicative systems and data

● Separate processes by product and/or by channel


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?

7

Silos cause value chains to break down


Digital Platform

A digital platform enables sharing of APIs across silo walls

8

From a Traditional Organization…Product-centric mindset

…To a Digital OrganizationUnified, capability-centric organization

Channels

Processesacross

journey

Data & systems


Organization



Channel A

SupportTransactOnboard ProtectAcquire

System & Data Layer

Channel B Channel C Channel D Channel E

Unified organization

Integrated channels

Capabilities-as-a-Service


RISE OF NON-CASH PAYMENTS

INFRASTRUCTURE CHANGES

CUSTOMER EXPECTATIONS

NEW PAYMENTS ECOSYSTEMS

REGULATIONS

Payments: market influences

9


Externally, a new payment ecosystem is emerging where banks can play central role

10


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

11


Integration enables automation and a bridge to new business models

12

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


Why is this important? Real-life examples

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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.


What do you need to integrate to the new business model

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Business process automation

Operating model transformation

End goal:




What you need:

● Access to core system data and functionality

● Discoverability of optimized workflows across multiple processes for reuse

● Visibility into code


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

15


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


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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All contents © MuleSoft Inc. 20

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


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


The API-led connectivity Approach: begin with mock service

Create an API and turn on the Mock Service

ProcessAPIsCreate Entity

Profile API


• 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


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


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

✓ ✓

57

07

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


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.


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


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


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


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%


Thank You!


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.


● 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.


● 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


● 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


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

transforming payments for corporate banking with apis · 2018-07-06 · transforming payments for...

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