WeBank, introduces the ‘3O’ Paradigm of Open Banking
Gartner has defined ‘Open Banking’ as a platform business where data, algorithms, transaction records and procedures are shared within the ecosystem to provide services to partners including customers, employees, third party developers, FinTech companies and vendors.
Last week (March 21, 2019), at the Money 20/20 Conference in Singapore, Henry Ma, Vice President and Chief Information Officer of WeBank in Singapore, introduced the ‘3O’ Paradigm of open banking services. He also discussed corresponding approaches for tackling the challenges involved and what a future world of ‘Open Banking’ would be.
Ma believes that the open banking model enables banks to embed their product, risk and technology capabilities into specific industries, while in turn banks are able to approach their target customers more directly. Banks can provide context-based financial services where customers need them most under various scenarios, while partner businesses without financial expertise and capabilities can better serve their customers. As a result, banks can reach the traditionally unbanked or underbanked long tail market and effectively promote inclusive finance.
The “3O Paradigm”
‘Open Banking’ has attracted growing attention from banks in China in the past year (2018) and many of them have launched open banking platforms based on API technologies.
However, according to Ma, open banking is more than API technology and is characterized by the ‘3O’ Paradigm, namely ‘Open Platform’, ‘Open Innovation’ and ‘Open Collaboration’.
- Open Platform entails the use of API, SDK and H5 technologies to provide banking services for partners.
- Open Innovation encourages open source software, intellectual property licensing and reference implementations to empower partnerships.
- Open Collaboration fosters business alliances on top of distributed technologies.
WeBank is proactively practicing the ‘3O’ Paradigm and applying its leading edge technologies in use cases of the financial industry as well as those of its partners in other industries, including legal services, media, entertainment, public and government services and retail businesses. WeBank is striving to be an innovator for contextual financial services, a pioneer in the technology community and an architect of the collaborative business ecosystem.
Risks and challenges
With the development of open banking, risks and challenges arise. Cybersecurity, connectivity with diverse and numerous partners, business continuity, data privacy and company culture are typical areas that need to be addressed.
To tackle these issues, it is necessary to come up with end-to-end cyber-risk assessment mechanisms and apply innovative technologies such as ‘Open Consortium Chain’ to simplify connectivity with partners, establish comprehensive business continuity plans, introduce blockchain-based distributed identity and privacy protection solution and nurture a culture of agile and decentralized decision making. These are believed to be some of the most important best practices for the Open Banking era at WeBank.
Source: WeBank Co Ltd