Open Banking

Why Open Banking?

The European Union “Revised Payment Service Directive” (PSD2) will bring banking and finance closer, integrating them with other industry sectors as it enables bank customers, both consumers and businesses, to use third-party providers to manage their finances. Third-parties will now have necessary access to data such that they can create value-added services that simplify complex process like secured and unsecured loans, mortgages, etc. Some call this the age of Open Banking. It will touch our day-to-day lives by providing services tailored for individual needs in purchasing, financial services, travel, health insurance, and investing.
In the U.K., the Open Banking Work Group has been working on an “Open Banking Standard” which is now published and due to be in use by 2019. The initiative aims to protect customers and give them more options, creating greater competition while encouraging innovation in banks. Other European countries are closely following the effort as the creation of a “standard” would significantly contribute to accelerating the implementation of EU rules on data and banking.

The Challenge of Open Banking

Before the change, banks had full control of the applications using internal APIs and thus could control system capacity demand and adjust their backend infrastructure systems accordingly. The biggest promise of Open Banking is to fuel innovation by enabling third-party companies and applications to provide new services based on accessing banking customers’ data using Open APIs. In order to provide an Open API layer to third-party applications, financial institutions will have to transform the way they expose APIs. Before Open Banking, only proprietary applications were able to access the data through an internal API. With Open Banking, the internal APIs will convert to public APIs and both proprietary and third-party applications will use these new APIs to access banking customers’ data.

Hazelcast Open Banking Platform

This will mean, that banks are no longer necessarily in control of their systems’ capacity needs, and the related backend infrastructure will need to be scaled in step with demand as it increases. Imagine a simple application that will find the closest ATM to you. To get the list of available ATM’s, the application will send a request to all financial institutions using their Open API and start displaying the results as they arrive. As a financial institution, it is in important to respond quickly in order to be top of the queue. If the bank’s backend system is not scalable and their Open API layer struggles to respond to a request, the bank can lose opportunities to competitors, resulting in dissatisfied customers and potentially subject to fines for non-compliance.

Hazelcast Open Banking Platform

The platform for Open Banking should be able to deliver on the necessary ingredients required to be successful such as performance under higher workload, scalability both horizontal and vertical, support analytic and transactional processing, cross application programming language support and more. The Hazelcast Open Banking platform natively integrates both Hazelcast IMDG (data storage & compute) and Hazelcast Jet (event processing) to present a platform for delivering elastically scalable Open APIs with ease. Hazelcast IMDG is the leading open source in-memory data grid, tried and tested in millions of productive system in leading banks around the world.

As with any emerging industry standard, greater flexibility is required in the early days to accommodate fast changes. The Hazelcast Open Banking Platform can provide that flexibility with scalability and ease of development for more complex event processing logic that will cut down the time and cost of change.

The Hazelcast Open Banking Platform has Hazelcast IMDG at its core as the fastest in-memory data and compute layer. This allows a bank to hold all or active data sets in memory while integrating with disk-based stores like RDBMS, Hadoop, MongoDB, etc. Hazelcast Jet, which is a stream and batch processing engine, utilizes the IMDG to provide high speed event processing with niche features like temporal sequencing, processing and comparing multiple event streams, performing analytical functions, etc. Hazelcast Jet is a DAG engine ready for programming the business logic — once again cutting down on setup and integration time.

Hazelcast Open Banking Platform

Hazelcast Open Banking Platform Key Features:

  • Platform with integrated processing and data storage
  • Supports real-time and batch event processing
  • Temporal sequencing of events
  • Supports advanced analytical operations
  • Both Hazelcast IMDG and Jet built using Java programming language
  • Supports multiple programing language clients: C++, C#/.NET, Node.js, Golang, Python, Scala and others
  • Scale-up and scale-out of system resources
  • Ready-made connectors to consume events from various sources
  • Easy to embed or integrate based on industry standard APIs

Both Hazelcast IMDG and Jet do not have any dependencies and hence can be embedded in other applications. Built in Java, it is also very easy to integrate with other applications. Services built using Hazelcast Open Banking Platform can be integrated with middleware like an ESB (Enterprise Service Bus) such as Mulesoft to be exposed through APIs in the Open Banking ecosystem.

Products in this Use Case:

Hazelcast IMDG

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Hazelcast Jet

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Next Steps:

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