Open banking platform to support DCB Bank’s future growth

While announcing the results for the last quarter of FY-19, Murali M Natrajan, Managing Director & CEO, DCB Bank, said, “We want to double our balance sheet in three to four years,”

From a technology perspective, partnerships is key to aiding growth – that is partnering with the extended banking ecosystem – which largely consists of fintech players. “For the bank to thrive and and enable our customers to access banking conveniently for their business and personal needs, we are adopting an open banking approach. This aids in the future expansion and distribution that could otherwise be a challenge,” says Venkattesh R, Head Banking Operations, Technology & Human Resources, DCB Bank.

DCB Bank announced the launch of its Open Banking Platform in February 2019. It was a significant step towards creating a collaborative ecosystem with enterprises, fintechs, app developers, enhancing customer-service delivery. The platform is hosted on-premise and developed, largely by the inhouse team, with support from an implementation partner.

Over 20 startups, fintechs, merchants, enterprises and developers have partnered with DCB Bank for access to its Open Banking Platform APIs as well as collaboration on innovation and customer centric products.

The Open Banking Platform APIs provides seamless integration of banking services by improving the existing banking technology infrastructure and at the same time meet the growing demand for innovative solutions from new-age customers.

The Open Banking Platform will further strengthen this ecosystem and allow fintechs and startups to test their innovations quickly and efficiently. It’s significant for a small and new generation private bank to have launched an API banking platform. “It differs from open APIs, which is one on one integration between banks and third party players, depending upon requirements without the presence of a dedicated platform, whereas an open banking platform requires a dedicated platform consisting of a developer portal. An organised system is set up to integrate with multiple partners like enterprises, fintechs and app developers, etc. Internally too, a comprehensive integration can be done within applications which can be also exposed to the partners,” says Venkattesh.

DCB Bank Innovation Carnival acted as the genesis of the need to have an open banking platform. DCB Bank runs a global innovation programme — DCB Bank Innovation Carnival — wherein it nurtures a strong relationship with the fintech and startup ecosystem, which includes engineering graduates; developers; startups. As of now, seven innovational carnivals have been conducted across the country. They are conducted both physical and online.

The need
DCB Bank was actively engaged with the fintech community since 2014-15. The deliberations had fructified into devising collaborative services. The bank was working with a fintechs in providing specialised services to the customers. “It was still one to one, wherein our APIs were linked with them. We thought, instead of having repetitive and time consuming process for separate services, let’s setup an organised platform that will prove as a one stop shop for the solutions they would like to work on. It’s a plug and play platform,” says Venkattesh. Under this arrangement, the partners can register on the platform and we expose them to our systems, upon which they can devise financial products or services.

Use cases for open banking platform
There are multiple areas in which the bank is working with partners – PAN verification, account and customer enquiry, fund transfer, remittance utilisation, etc. One more, GST return filing use case can be about having a partner who can enable the bank’s SME customer to enable the GST return filing in a seamless manner directly from the current account. The partner will connect the GSTN to the customer and on the other hand, the customer has a direct connectivity of the GSTN network via the DCB Bank’s current account.

Benefits to the bank
Cost advantage
Opportunities for new revenue streams
Improved customer experience
Sustainable service model for traditionally underserved market
Increased customer engagement
Meet customer expectations
Enables bank to work with non banking platforms e.g. ticketing, health, real estate

Benefits to product and business teams
Improved customer engagement
Building banking as a service to create new platforms for customers
Better understanding of business of partners through data analysis
Better cross selling
Monitor digital revenue through MIS and dashboards

Benefits to fintech
Access to APIs and domain guidance
Literature around product domain and ideation
API feature definitions to do agile development and adequate coding / testing and acceptance control
Support during prototype creation roadmap

Benefits to internal teams
Easy API integration that shares similar applications. It promotes agility and speed
Easy API lifecycle management
Change management
Billing and performance monitoring

Benefits to developers
Access to APIs to build prototypes in a quicker fashion
Easy validation of ideas before making actual products
Reduce time and cost to market

Securing the open banking platform
Information security and cyber security is a journey and not a destination in an open banking architecture. Venkattesh feels, “We keep updating policies, integrating tools and adhering to new compliances as and when they arrive. We have a strong governance platform as far as the API banking platform is concerned. There is a proper balance in providing customer comfort and managing security at the same time,”

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