IT consultancy CGI launches open banking solution

13 June 2018 Consulting.ca

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.IT consultancy CGI launches open banking solutionMeanwhile 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.

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More than half of Canadians would share personal data with banks for discounts

09 April 2019 Consulting.ca

Over half of Canadian consumers are willing to share important personal data (location data, lifestyle info) with banks and insurers to receive lower pricing on products and services, a recent Accenture report found.

As part of Accenture’s global Financial Services Consumer Study, the consultancy surveyed 2,000 Canadians on their views around sharing personal information with financial services firms. With the increasing popularity of Big Data and analytics – and the massive opportunity for competition-smashing insights therein – companies want to know how to get consumers on board with data harvesting.

A majority of Canadian respondents said they would give banks and insurers some (location data) or a lot (lifestyle habits) of personal data for lower prices (59%), faster loan approvals (53%), location-based personalized offers (53%), and personalized services that help reduce injury risk (53%).

Nonetheless, 72% of Canadian consumers said that they are very cautious about the privacy of their personal data, with security breaches the second-largest concern that would make consumers leave their bank or insurance provider (price increases were number one).Consumers willing to share personal data in select scenarios

Banks and insurers, however, rank fairly high on consumer trust indexes – certainly higher than Facebook or Google – institutions for which consumer data is a major source of income. Banks ultimately make their money from money, and consumer data will help them make more of it. They also have more trust capital to work with than other organizations, which might have to offer significantly higher loyalty card-type incentives to get their hands on consumer data.

"Canadian consumers are willing to sharing their personal data in instances where it makes their lives easier but remain cautious of exactly how their information is being used," Robert Vokes, managing director of financial services at Accenture in Canada, said.

Globally, 64% of consumers were interested in adjusted car insurance premiums tied to safe driving, and 52% were interested in life insurance premiums tied to a healthy lifestyle. Meanwhile, 79% of Canadian consumers would give either income, location, or lifestyle habit data to their insurer for personal services and information that help reduce the risk of injury or loss.

In banking, 46% of Canadians said they would want their bank to provide savings tips based on their spending habits. As such, the avenue is open to source more consumer data, but financial services firms have to offer clear, tangible, and useful benefits to consumer in return.

Looking across the globe, cultural attitudes toward privacy maintained their standard variation, with only 40% of privacy-conscious Germans willing to share more data with banks and insurers for personalized services, while 67% of respondents in China were willing to share more data in return for personalized services.