Vigilant and alert to the threat of disintermediation

This is an excerpt from a transcript of The Axway Blog Team’s podcast, “Key takeaways of the ‘Speed to Revenue and Improved Customer Service’ white paper.”

ANNOUNCER: Hello everyone. The Axway Blog Team recently had a chance to catch up with Peter Benesh, Axway’s director of solution marketing for the Financial Services industry, and ask him to share his thoughts on the key takeaways of the IDC Financial Insights white paper titled “Speed to Revenue and Improved Customer Service: How Data Agility Underpins Success for Financial Institutions in the New Digital Economy” by Alex Kwiatkowski. Key Takeaway 3: Established banks and insurers must remain vigilant and alert to the threat of disintermediation posed by alternative providers unencumbered by legacy IT and possessing inherent data savviness. Institutions will avoid disintermediation by collaborating more with other members of the financial services value chain, including a degree of coopetition.

PETER BENESH: The legacy IT, I think, would be… A lot of banks still run a lot of their backend systems on main frames. A proprietary technology. Applications that they may have developed themselves. Architectures that are very closed and proprietary and very difficult to open up and share information with other apps, especially in a B2B environment outside of the organization’s firewall. Newer players that are involved in payment facilitation — I’ll just use PayPal as the best example of this, probably the one that’s most well-known. Google digital wallets, and so forth. There’s been a lot of hype about that. I can’t remember where I saw it, but I saw a statistic that in terms of actual adoption of a digital wallet, it’s still fairly low, but definitely most people should be familiar with how PayPal works. That’s basically an alternative to buying something and having to put in your bank routing number and your account number and telling the vendor to go find your account at your institution and pull money from it. PayPal just provides a much faster and simpler way to do that, to the extent that normal banks can’t compete with that. Again, they’ll be disintermediated. They’ll lose business from an electronic payment standpoint if they can’t be flexible and open like PayPal is.

To download the white paper, click here.

To listen to the podcast on YouTube (audio only), click here.

Strike a balance between data opacity and safe innovation

This is an excerpt from a transcript of The Axway Blog Team’s podcast, “Key takeaways of the ‘Speed to Revenue and Improved Customer Service’ white paper.”

ANNOUNCER: Hello everyone. The Axway Blog Team recently had a chance to catch up with Peter Benesh, Axway’s director of solution marketing for the Financial Services industry, and ask him to share his thoughts on the key takeaways of the IDC Financial Insights white paper titled “Speed to Revenue and Improved Customer Service: How Data Agility Underpins Success for Financial Institutions in the New Digital Economy” by Alex Kwiatkowski. Key Takeaway 2: The regulatory landscape around using, managing, and governing data must be constantly kept in view. Compliance with mandatory policies is of course essential, but institutions must also strike the correct balance between data opacity on the one hand and “safely” innovating when it comes to the creative use of information to improve operational and financial performance.

PETER BENESH: You want to give the outside world access to certain parts of your applications. But not just free-for-all, open-the-kimono, you-can-get-anything-you-want-you-can-see-anything-you-want. So we can maintain appropriate levels of privacy by the types of security we have in the gateway, and the types of permissions that we allow, such that only specific types of data are allowed to be accessed by developers. If something is truly private, it could either be masked so that when the API accesses it, it’s just genericized so that the outside world really doesn’t know the specifics of it. Or they could just be completely locked down and inaccessible because it’s just not the types of data that we’re ever going to let third parties get access to. It really depends on the outside applications that are being used. Who’s using them? Is it an individual that’s using a mobile app to access their personal accounts over their smart phone? They mentioned an example of Dun & Bradstreet trying to get access to certain types of financial information through an API. It all depends on who the end user is, what types of information they specifically need, what kind of app they’re using, and what kinds of permissions and authorizations should they be given.

To download the white paper, click here.

To listen to the podcast on YouTube (audio only), click here.