BNL collaborates with Tink on multi-banking technology
A result of the companies’ broader strategic alignment in the European market since the beginning of 2020, the new ‘multi-banking’ feature will allow customers to gain a holistic view of their finances by consolidating account overviews (even those held with other Italian banks) in a BNL-developed environment.
Regarded as merely the overture of an increasingly interwoven relationship, the next step is anticipated to be focused on money management.
“With over 100 years in the banking industry, BNL is one of the most respected and well-known banks in Italy. This first important step in our partnership gives BNL’s 2.5 million customers a better understanding of their finances with just one app,” said Daniel Kjellén, Co-Founder and CEO of Tink.
“We look forward to continuing to work with BNL, as part of our strategic partnership with BNP Paribas, to help it create more services powered by open banking technology.”
The power of collaboration
Incumbents might have an inherent advantage over challenger banks because of their well-established customer base, but this cannot and will not sustain lasting prominence.
BNL, through its partnership with Tink, appears to be aware of this and because of its perspicacity has now achieved something relatively unique in the Italian banking market.
“We are one of the first banks in Italy to offer multi banking to its customers, helping them to better manage their money by having an overview of their finances held with different banks, all in one place,” said Marco Tarantola, BNL Deputy General Manager and Head of Commercial Banking Division.
“This is the first step in our collaboration with Tink, which will enable us to continue developing our open banking strategy – driving innovation for the bank and adding real value for our customers.”
With Tink’s platform now being used to connect over 3,400 banks and 250 million customers across Europe, the utility of incorporating digital is now almost axiomatic.
McKinsey & Co the results of major incumbents utilising digital techniques with startlingly positive results. For instance: “Goldman Sachs’ Marcus consumer lending franchise...surpassed $3bn in US consumer lending volumes [in 2018].
“Goldman used established digital sales and marketing techniques to become a leading provider of consumer finance in a short period of time. It hit $1bn in loans in just eight months while many competitors took over a year.”
Zafin: Banking is now in the era of the tech ecosystem
The development of tech ecosystems is placing the future of post-COVID banking in jeopardy. At a time when Big Tech can replicate the functions of traditional financial institutions, what can banks do to retain a grip on the market?
John Smith, EVP Ecosystem at Zafin, has a few ideas. A SaaS cloud-native product and pricing platform for financial institutions, Zafin is preparing the next generation of banks to cope with this precise challenge.
Smith is responsible for the strategic and tactical management of the company’s ecosystem, including the creation of new business models to support growth and differentiation. We asked him four questions:
Q. Have the events of the pandemic caused an irreversible shift in the digitalisation of banks? If so, is COVID the sole cause or are there other factors?
It’s a great question and one that I am asked a lot. Without a doubt, the COVID-19 pandemic has driven a significant shift in the acceleration of digital. In fact, I’ve seen some estimates show there to have been as much as four to six years of digital adoption growth since the initial lockdown started.
While the pandemic may be the primary reason for this growth, two other drivers include fintech disruption and the high costs of operating a traditional retail bank. Both of these factors have caught the attention of banking executives as they set their minds on accelerating digital transformation with a focus on high return, low risk.
Q. Some commentators believe banks must learn from Big Tech in order to survive. Do you agree? Please expand.
I agree completely; we’re living in the era of the ‘ecosystem’. All the seismic shifts we’re seeing in technology, be it aggregation, embedded finance, DeFi or hyper-personalisation are all enabled by the foundation of an ecosystem.
When financial institutions work with a strategic partner like Zafin, which has made the strategic investments in a best-in-class ecosystem, they’re able to capitalise on opportunities more quickly and safely, and will be better positioned for growth now and at the other side of the pandemic.
Q. What are currently the obstacles to adopting Open Banking? Is it more likely to 'take off' in some regions rather than others?
I would argue that Open Banking has been in the US for some time and will only continue to grow there. By definition, Open Banking is about the secure sharing of financial information that customers are aware of and have authorised. Under that definition, we’re seeing aspects of this well underway even though its full potential remains to be seen.
Third-Party Providers are a natural outcome of Open Banking, whereby they can create propositions beyond what a bank normally does to enable banking functions such as payments, borrowing, saving and so on. Once again, some of these are already present through industry-led initiatives, whereas regions such as the EU have taken the pathway of regulation such as PSD2.
The industry-led initiatives we’ve seen in the US have also had the added advantage of guard-rails that regulatory bodies like FFIEC and CFPB provide. There are also other technology-led initiatives such as API definitions that are set out through the FS-ISAC.
I would argue the future of Open Banking in North America will be through the natural evolution of the guidelines and API definitions that have been published, as well as the natural progression of industry initiatives.
Q. Are there any other bank tech trends you'd like to discuss?
Coreless banking. Zafin has been pioneering some of the work around externalising functions out of the legacy core to drive a more ‘fintech nimble’ bank, while not having to deliver a ‘heart and lungs’ core bank replacement.
Real life examples of this include moving some of the core functions of a banking system, such as product and pricing to a platform like Zafin. Origination, onboarding, KYC, risk, and compliance are all other examples of externalising banking functions for added agility.