IT consultancy CGI launches open banking solution

Montreal-headquartered IT consultancy CGI has released an open banking solution for its financial services clients. CGI Open Finance streamlines the integration of fintech apps with traditional banks while ensuring security and compliance with European regulatory frameworks.

With third-party finance apps becoming more entrenched with consumers, the need for safe sharing of customer banking information is becoming more pressing. ‘Open banking’ basically allows banks to share customer data with rapidly proliferating fintech firms and third-party financial apps in a more secure fashion. Before open banking, customers would just give their login info and account details to the app, and it would ‘screen scrape’ to get the needed banking info – a less than ideal process in terms of security.

With open banking, third-party apps get access through application programming interfaces (APIs), a means of connecting two software components and transferring data. APIs also allow the development of other apps, while streamlining the whole process in terms of documentation and admin. APIs are also, critically, a more secure method of data sharing than the previous ‘scraping’ method.

The end point of all this is to create a universe of useful financial applications that can use a consumer’s banking information to offer a raft of products and services – something more akin to a Google Play Store of finance apps, instead of today’s fragmented and singular traditional banking apps.

Open banking has been driven forward at rapid pace in Europe, with the European Union’s Payment Services Directive 2 including provisions to make banks allow third-party API access. PSD2 came into force in the UK early this year, making it the first country to implement open banking – though five of the nine British banks involved didn’t meet the deadline and were granted an extension.Meanwhile in North America, open banking has yet to take off. There is little in the way of regulatory impetus as of yet in Canada and the United States, with the Canadian federal government only announcing the intention to ‘study the merits’ of open banking in February of this year. Clearly there is a long road ahead for the implementation of open banking in Canada – impeding the increased competition and catalyzing of the burgeoning fintech industry that traditional lenders might hope to delay for as long as possible.

In Europe, however, regulatory compliance is making banks’ range of decision-making tighter – be it in the form of the UK’s Competition and Markets Authority (CMA) or the aforementioned EU PSD2. In this shifting banking climate, Montreal-based technology consulting firm CGI has released its Open Finance solution. The consultancy hopes to sell the complete open banking solution to traditional banks embracing the new realities of the changing banking environment.

CGI Open Finance simplifies the implementation of open banking, integrating the product-centric apps of traditional banks with fintech apps through an API layer. CGI’s offering provides a secure and resilient platform for the new banking reality. Rolling with the punches, traditional banks can instead develop new value propositions and revenue streams by partnering up with third-party fintechs and CGI.

“CGI Open Finance is modelled on our successful partnership with a leading multinational which was looking to design, develop and launch a new API-based bank,” commented Frederik Evrard, Vice-President, CGI in Luxembourg. “We are excited about the opportunities it offers our clients. By incorporating the latest technology and architecture with CGI's deep banking expertise in open banking and the open API economy, we believe CGI Open Finance can transform the industry.”

Importantly, CGI’s architecture ensures compliance with open banking regulations, from PSD2 to CMA, STET, and Berlin Group transactions. CGI Open Finance also facilitates close collaboration with third-party providers, and includes an enrolment portal and consent management. The solution also offers sophisticated analytics and smart security, as well as billing and monetization options.

In other CGI news, the firm recently acquired Quebec-based IT consultancy Facilité Informatique. The growing firm has more 73,000 professionals 400 locations worldwide – making it one of largest IT and business consulting firms in the world.