Bank as

a Platform

Rethinking the banking value chain

for optimal competitiveness
Table of contents Major trends reshaping the industry 03
A shifting business 03
Customer-centric transformation 03
Risk being transferred to customers 04

Bank as a Platfom as a service delivery model 04

Bank as a Platform requires a flexible open architecture 05

GFT’s experience and capabilities 06
Bank as a Platform experience 06

Meet our specialists 07

About GFT 07

2 Bank as a Platform
 Banks today operate in a fiercely competitive market,
with revenue streams being challenged by new customer
behaviours, low interest rates and the entry of agile new
market participants.

In order to survive in the long term, banks are adapting

and evolving to keep their customers engaged, whilst
continuing to pursue the most efficient and effective
solutions in order to do so.

Utilising a Bank as a Platform approach, banks are able

to shift to a business model based on service offerings
as a way to achieve greater and more sustainable
economic value.

Major trends reshaping the industry

Until recently, the banking business
model has been seen as so
restrictively regulated that new
players have been discouraged from
entering the market. This, along with
the fact that the very core of banking
is based on value as it pertains to
money, has enabled banks to enjoy
a relatively comfortable competitive
position for decades. Banks have
been able to achieve sustained
profits primarily from differential
interest rates achieved between the
acquisition of liabilities and the sale
of assets, as well as from financial
intermediation.
However, this enviable situation
is coming to an end. Today, the
foundations of the banking industry
are being shaken to their roots as a
result of three major trends:
1. A shifting business model
The sharp drop in interest rates, which
most financial experts are saying will
continue for some time, is negatively
impacting bank profits. This is
forcing banks to rely increasingly on
commission payments for services
provided to customers, partnerships
with third party providers, or directly
with customers by assuming these
third parties’ roles.
In addition to lower profitability,
regulation is changing quickly and is
no longer protective, but rather the
opposite, as new regulations aim
to open up the market. As a result,
competitors that have until today
been discouraged by regulation are
now increasingly attracted to the
financial services market.
2. Customer-centric transformation
Digitalisation has made it quick and
easy to copy products, turning them
into commodities and rendering
them valueless in terms of customer
loyalty. Products alone are no longer
of interest to the customer, nor are
they a source of differentiation for
the bank. A bank’s economic value
generation has shifted from focusing
on product creation (efficiency and
quality) to customer satisfaction.
Businesses across the board are
moving from being product-centric to
being customer-centric.
At the same time digitalisation, which
gives customers direct access to
global knowledge sources and peer
advice, has enabled customers to
feel that they themselves can make
more accurate judgments about
their finances than an outsider
(for example, a banker). To remain
relevant, banks must place their
customers at the centre of their
strategies and be able to meet their
needs, via whichever channel and
touchpoint the customer requires.
Digitalisation and new technology
have greatly increased the number
of touchpoints at which customer/
bank interaction takes place (the
customer journey). Banks need to
understand that journey in order to
present customers with relevant and
timely offers.

Bank as a Platform 3
3. Risk is being transferred to
customers
As margins from differential interest
rates have begun to drop and the
market becomes more volatile, end
user and business customers have
been increasingly pushed to take
on more risk. For bank customers,
with interest rates approaching zero,
leaving money in the bank ceases to
be an attractive option. Customers
have had to make their own
investment choices to have any hope
of potential profits.
However, as customers take on
more risk, they also start to question
the value that banks bring to the
Bank as a Platfom as a service delivery model
To focus on service provision, banks
must reconsider their customer
segmentation and customer
interaction models. Segmentation
based on economic capacity
needs to be enhanced by new
segmentation models that are based
on the customer’s preferred choice of
engagement with the bank and with
other financial services players, such
as crowd funding, capital risk, etc.
Customers’ choices also affect
the timing and location of their
interactions with the bank, expanding
the range of touchpoints that are
expected to support financial services
provisioning. By understanding and
following the ‘customer journey’,
banks can take steps to make
themselves available to customers
at any time, through their channel of
choice, offering more targeted and
relevant interactions.
The value chain in most industries
can be deconstructed into three
distinct areas: ‘the product’, involving
the manufacturing of the product
itself and all aspects related to it;
‘the process’, encompassing the
operations necessary to bring the
product to market and to manage
it; and ‘the retailer’ delivering the
product to the end consumer through
a combination of sales, marketing,
and customer service channels.
Banks need to follow the same
4 Bank as a Platform
transaction. Certainly, banks remain
one of the safest places to keep
money, and they offer the broad
ability for customers to access and
spend their cash, but they are also
perceived to offer little additional
value, especially when compared to
innovative new competitors.
New entrants, such as FinTechs and
large corporations with high-loyalty
brands have begun to enter certain
areas of the financial services market.
Particularly focused on the payments
and lending segments, these new
entrants are attempting to convince
customers that they can provide
greater value than the traditional
banks. Banks need to regain customer
model to achieve success in today’s
hypercompetitive market. This
customer-focused, service-led model
addresses the monolithic structure of
the ‘classic’ bank, by providing bank
and other added value services when
and where the customer needs them.
Banks need to consider in which
areas of the value chain their greatest
strengths lie, as it is unlikely they
will be able to efficiently address all
areas. Providing additional non-core
services will require banks to partner
with other financial service providers
(FinTechs, payment service providers,
social fundraising/lending platforms,
other banks, etc.) to achieve a broad
range of services and to respond
appropriately to the needs of each
particular market segment. Under
this overlapping vision of the banking
industry, a bank may play different
roles at different stages of the
customer journey, and this may vary
over time, depending on the customer
segment and active touchpoint.
By adopting a service-led customer-
centric approach, banks can offer the
optimal service to their customers,
either by focusing on their strengths
in developing their own products,
by offering third party products, or
even by using other banks’ platforms.
In order to provide their customers
with value-added digital services,
banks must significantly improve their
trust and offer value-added services
that customers consider to be worth
paying for.
The combination of these three
factors is causing banks to review
their business models in favour of
one where services are the primary
revenue generator. In order to do so,
besides the services themselves, it is
necessary to have a single platform
from which services can be provided.
This notion shapes the Bank as a
Platform vision, a place where the
bank and other service providers
make services of any type available
to customers, and where customers
come to obtain and consume them.
technology and base it around agile
governance and open Application
Programming Interfaces (APIs).
New examples of banks embracing
the Bank as a Platform approach
are emerging all the time. For new
challenger banks unencumbered by
legacy technology (such as Fidor,
Atom, Aldermore and others), having
open APIs connecting services that
can be offered to customers is an
obvious first step. For traditional
banks, with legacy technology this is
more of a challenge, however, they
must plan for a platform banking
future. Notable success stories having
adopted this approach include BBVA
and Fidor Bank (also now offering its
technology as a potential solution!).
 Bank as a Platform requires a flexible open architecture
Traditional banks frequently find
themselves struggling with an IT
architecture that lacks the speed
and flexibility needed in today’s
market environment. Bank as a
Platform requires a service-led open
IT architecture capable of coexisting
with core banking systems, whilst
ensuring a seamless exchange of data
between the bank and third parties.
An open banking architecture is
based on the following components:
■ Scalable open API platform
■ Centralised API Manager to ensure
the connected services operate
together seamlessly
■ Robust Business Process
Management (BPM) workflows, both
internal to the bank and reaching
out to the customer
Bank as a Platform requires
a flexible and open IT
architecture capable
of coexisting with core
banking systems, whilst
ensuring a seamless
exchange of data between
the bank and third parties.
Bank as a Platform
■ Easy-to-integrate front ends and
‘plug and play’ connections.
■ FinTech integration
In addition to these elements, it
will be necessary to have a ‘layer
of interaction’ around the entire
infrastructure. This includes: where
to locate the necessary connectivity
for the APIs and API Managers,
connecting the different front-ends of
clients and the structural elements to
control the interchange of information
between the bank and its partners,
including:
■ Third party communication
■ Data flow synchronisation at
differing traffic speeds
- Freezer and synchroniser
software devices
Customers
Process
Product
Retailer
Conectivity layer
S u p pli e r s
■ Symmetry of information
- Symmetry control
■ Homogenisation and formatting
- Information homogenisers
- Information Format Module
- Repositories of historical
information in native formats
■ Modularity management
- New Smart Transaction
Management (STM) and Personal
Financial Management (PFM)
tools
- New desktop tools
- Security repository
■ Scalability
For additional information on these
structural elements, please refer
to our technical paper ‘Modular
architecture to support the Bank
as a Platform vision’.
5
GFT’s experience and capabilities Bank as a Platform experience

For three decades, GFT has been

GFT is uniquely positioned to help address the need for banks to migrate to a
working with global leaders in the
Bank as a Platform model. Our consultants have three decades of experience in
banking industry. Projects in the area
the banking sector, defining, designing, developing and integrating a large number
of Bank as a Platform include:
of applications and IT services for local and international banks using all types of
front ends.
■ Development of scalable open
APIs to facilitate passive and active
Our services include the creation, integration and adaptation of multiple aspects
connections between the three
of applications, including control, security, reporting, accessibility, management,
value chain areas and third party
and physical and functional architecture. We are very experienced at working with
providers. GFT implemented an
modern, legacy or, most frequently, hybrid technology environments. To support the
API development framework for
Bank as a Platform vision, GFT provides IT consulting and development services for
a systemically important Spanish
efficient open APIs with scalable design that can be used for multiple purposes, now
bank to ensure consistency across
and in the future, to meet any new requirement. We also ensure the development of
country development. In Germany,
a control layer to manage APIs while preventing unauthorised access and ensuring
GFT has implemented mobility apps
smooth interoperation via an API Manager.
for the newly launched O2 Bank
(powered by Fidor Bank), providing
GFT has worked with a number of traditional banks to define their Bank as a Platform
back-end architecture support for
journey, as well as emerging new banks such as Fidor in the development of an agile
open APIs.
and flexible open banking platform.
■ Implementation of access control
A typical GFT team is composed of a balanced mix of multidisciplinary individuals
units to ensure safe and compliant
with diverse experience that provides our customers with the highest levels of
data sharing and allow authorised
effectiveness and efficiency. Millennials and seasoned consultants working together
payment operations to third parties
is a key factor in attaining a consistent level of excellence.
(Payment Service Providers).
In collaboration with a leading
Our consultants will work with clients to evolve their existing IT infrastructure
European bank, GFT is prototyping
into one that is capable of supporting the Bank as a Platform vision, enabling the
a scalable asset (proof-of-concept)
institution to move quickly and embrace new market opportunities.
based on PSD2 requirements
to manage customer access
GFT can help you create a strategic path to realise your Bank as a Platform vision.
permissions.
Contact our specialists to understand how we can help you transform and accelerate
your platform banking aspirations.
■ Development of applications and
integration of third party products
businessmarketing@gft.com
into any technological environment:
www.gft.com
- Enriching customer information,
PFM, STM, geolocation.
- Internal reporting, data
warehousing, business intelligence,
enterprise information systems,
management information systems,
big data.
- Control and security elements,
such as Blockchain.

■ Construction of detailed reports

Building on an open API foundation, banks for bank customers covering the
appropriate access that is allowed
can offer optimal services to their customers, for their individual accounts.
either focusing on their strengths in utilising ■ Development and implementation
their own products, by offering third party of Bank as a Platform concepts in
partnership with Figo, a pioneering
products, or even using other banks’ platfoms European banking service provider.

6 Bank as a Platform
 Meet our specialists
Christian Ball
Christian is Head of GFT Retail Financial Services across the Atlantic Region,
specialising in helping retail banking clients realise their strategic vision for platform
banking. He brings extensive experience to this role, spearheading the GFT Retail
offering. He was previously at Meniga, one of the top performing FinTech companies
in Europe, before which his previous roles have seen him work with many of the
leading banks to shape their digitalisation strategies - including positions at Cap
Gemini, Fiserv and Accenture, where he led Business Development for Accenture
Software globally.

José Luis Murcia

José Luis is a Manager at GFT, specialising in compliance and IT architecture. He
has over forty years’ experience in banking, of which more than thirty in IT at both a
local and a global level, including as IT Director responsible for financial, reporting,
compliance, and access and distribution channel systems. Most recently, José Luis
has acted as an expert advisor to a number of European banks as part of his work at
GFT. He holds a Bachelor’s degree in Psychology (specialising in pedagogy) from the
Universitat Autònoma de Barcelona (UAB)

About GFT
GFT is a business change and technology consultancy
trusted by the world’s leading financial services institutions
to solve their most critical challenges. Specifically defining
answers to the current constant of regulatory change – whilst
innovating to meet the demands of the digital revolution. GFT
Founded in 1987, the company is now represented in twelve
countries with a global team of almost 5,000 employees.
This report is supplied in good faith, based on information
made available to GFT at the date of submission. It contains
GFT-170208-PoV-RB-Bank_as_a_Platform-EN-mkls

brings together advisory, creative and technology capabilities confidential information that must not be disclosed to
with innovation culture and specialist knowledge of the third parties. Please note that GFT does not warrant the
finance sector, to transform the clients’ businesses. correctness or completion of the information contained. The
client is solely responsible for the usage of the information
Utilising the CODE_n innovation platform, GFT is able and any decisions based upon it.
to provide international start-ups, technology pioneers
and established companies access to a global network,
which enables them to tap into the disruptive trends in
financial services markets and harness them for their out
of the box thinking.

Bank as a Platform © GFT 2017 www.gft.com businessmarketing@gft.com 7