Nordea takes Open Banking beyond PSD2

As they announce via their press release:

“Nordea is launching Instant Reporting, a new Open Banking solution that enables corporate customers to access their own accounts and integrate real-time data with their own systems and processes. It is the first offering from Nordea that moves beyond legal requirements in PSD2 and turns Open Banking into a commercially viable product.”

This is part of their strategy of bringing Open Banking to Sweden. Nordea’s Open Banking platform was launched at the end of 2017 when Finnish customer data was made available to third party developers. Open Banking Expo reports on this here.

Ultimately they envisage it will become a transformational force in the corporate banking market.

From Developer Portal to Digital Ecosystem

Their developer portal is clearly a very well presented, engaging experience for which they won the Banking Technology Award for Top Digital Innovation in 2017. Their Open Banking brochure provides a comprehensive introduction and there is a Trello roadmap and Github repo.

The Nordic API portal documents a Nordea case study, and at one of their workshops their Open Banking lead Gunnar Berger shared the story of their journey.

Gunnar introduces the presentation by describing the emergence of Open Banking as a trend that required the bank to rapidly adapt, no insignificant challenge given for organizations of their size it is like changing the course of a supertanker.

With € millions in funding they took a first step of buying an API management platform and begun building APIs. An early challenge was found that focusing on both compliance and new opportunity innovation proved difficult, so Gunnar directed the team to only focus on compliance.

However they found that market demand forced a change of this mindset. Taking their first steps of launching a simple beta tester sign up page they expected only 50 or so respondents but were deluged with over 300 in the first 72 hours. A keen insight explaining this was feedback that they were the only bank engaging with Fintechs. Over 500 signed up from this launch.

Ultimately Gunnar was persuaded by the team to adopt an entirely open culture. Rather than hand picking beta testers to be approved for their program, purposely excluding other banks, they instead opened it up to any and all who wanted to participate.

This led them to a key success factor for building developer ecosystems – Engagement through social media. They launched a blog and Twitter account, and went on a tour to meet with potential partners and and walk them through their developer portal. Their Medium blog provides regular Open Banking insights and news about their products.

Fusing Scale and Innovation

Gunnar defines the key characteristic of the trend through his own banking career history, which has included managing many of the banks legacy technologies, from file transfer through online banking, using what he describes as technologies from the 1970s.

For some of these systems this means they are only able to achieve up to four new releases per year. In contrast divisions like Payments is releasing every day, and Gunnar wants to achieve that same agility for their Open Banking platform.

Indeed this is the very essence of the strategy, to combine the two worlds of fast moving Fintechs with their platform as a large corporate, leveraging their major assets of scale, finance, brand and customer base.

Gunnar’s vision is that this strategy will evolve from just an initial PSD2 platform to one of a marketplace of new digital solutions, accomplished through this fusion, where their portal acts not just as a developer toolkit but as an ecosystem that enables partners to meet, catalyze and build innovative new digital services. A “Spotify effect” that sees it evolve even beyond banking, to instead become a means to build larger overall online services of which financial products are only a component part.

“The combined changes in technology, consumer behaviors, and regulations are fueling a rapid transformation of the financial landscape. Reactive banks risk losing business to innovative proactive banks can gain business by teaming up with the new players. Nordea is developing an open banking platform based on the open API technology to cater to the PSD2 compliance needs but also to create new possibilities for the bank.”

Sarah Häger, Head of Nordea’s Open Banking Community, shares this online presentation that provides a visual walk through of this vision, and Janne Uggeldahl’s presentation at APIdays Helsinki dives into more of the technical detail of how the platform works and services are developed.

 

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