Open APIs for Open Banking: How Poland’s Alior Bank Does It

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The banking industry is going through a technological revolution on a mass scale, as more clients turn to digital channels. With fewer visits to bank branches and fewer transactions made over the counter, financial operations have gone digital. This shift has led to the growth of FinTechs, technology companies which are increasingly expanding into financial services to provide innovative solutions to traditional industry problems.

The rise of open banking is one of these innovative solutions. “Open banking” allows banks to share data with third-party companies or apps through APIs, securely and in real time. Making their valuable data accessible to other parties, banks attempt to build a better customer experience.

Instead of competing, banks and FinTechs can leverage their complementary strengths to build the right solutions for customers.

One area where open banking will prove particularly useful is the newly revised Payment Services Directive, also known as PSD2, which will go into effect in 2018.

PSD2 is focused on standardizing, integrating and improving payment efficiency while promoting innovation and offering better consumer protection throughout the region. PSD2 will require that European banks make it easier to share data with third-party providers, which will enable these third-parties to build financial services on top of banks’ data and infrastructure. In the future, you may be using social media to pay your bills or make P2P fund transfers, all while still having your money in your bank account.

Through the PSD2 directive, the European Commission aims to improve innovation, reinforce consumer protection and improve security of internet payments and account access. So what does this mean for banks and their customers?

Working with IBM, Poland-based Alior Bank will be one of the first to implement an Open API platform that will largely contribute to make the bank both PSD2-compliant and will allow a seamless integration with FinTechs and developers. This means that we will now be able to introduce new services even faster, further capitalize on customer data to better understand our clients and partner with other organizations to improve our solutions.

Alior Bank is a leading universal bank in Poland that works with both individuals and business clients. To face the technological revolution in the banking industry, the changing expectations of clients, and increased competition, we believe Alior Bank must transform from a financial company with a strong IT department into a FinTech with a banking license.

We observe partnering with IBM in developing API Connect solutions as an integral part of our focus on delivering digital disruption to all of our clients by 2019. Our objective is to remain an innovation leader in Poland and become one of the most innovative banks in Europe. In addition, we’ve also decided to invest another $ 100 million in innovative technological projects in the next four years.

Creating an ecosystem for cooperation with FinTechs is one of the pillars of Alior Bank’s “Digital Disruptor” strategy, announced in March. Alior Bank will be the first financial institution in Poland to provide a testing environment for developers and FinTechs to create innovative services safely, while also seamlessly integrating them with bank services through its newly developed Open API platform.

IBM’s API Connect solution will enable secure and quick integration between Bank and FinTechs, rapid prototyping of their solutions and fast cycles of testing to fine-tune them before release to Alior Bank’s clients. This is a response to Alior Bank’s strategy to build 20 business partnerships by 2020 and to be recognized as the first bank of choice for FinTechs across Europe.

Alior Bank was looking for a secure solution to fully address the forthcoming PSD2 regulation and to actively implement open and trusted economy in Poland. Working with IBM’s API Connect solution will ensure that clients’ data is securely protected.

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To learn more about Alior Banks “Digital Disruptor” strategy – please visit here.