Mobile network operators have become disruptors to traditional financial services, leveraging partnerships with fintechs and other micro-financial institutions.
Changes driven by fintech companies are often perceived as a threat to traditional financial service providers where new innovative business models are evolved. However, at Standard Chartered, we welcome such changes especially in markets where we are looking at an unprecedented opportunity to provide efficient access to financial services particularly to the unbanked or underbanked populations.
Traditional banking institutions need to continue to transform in order to compete in a meaningful manner, leveraging on the success of innovation in the retail space.
For example, the use of data analytics and APIs are important areas in which to build new capabilities and products for distributing financial services in Africa via mobile networks.
Looking at the trend of digital transformation globally, market participants such as banks, securities exchanges and regulators around the world are also experimenting and moving to blockchains, APIs, data analytics and machine learning. It is therefore essential to be ready to handle upcoming changes in the communication infrastructure with clients, market participants and infrastructure providers.
At Standard Chartered, we are constantly investing in new technologies and products which could enhance our offerings to clients in Africa. For example, we have created a blockchain bridge to translate messages between different blockchain technologies to allow interoperability and facilitate atomic swaps of tokens across different blockchains. If an asset can be traded against any other asset or currency in their digital form, we are well placed to enable such transactions.
Besides exploring new technologies, we are contributing in two ways to the fintech ecosystem:
Given our involvement in the Africa financial industry, we are exposed to a huge set of data on the ground. Utilising the data responsibly and sharing industry insights with fintech companies ultimately allows for improved products and services for clients.
Banks and fintech companies must leverage on each other’s strengths to stay ahead. For example, the nimbleness of fintech companies, the trust clients have in banks, and the data which established banks have can work hand-in-hand to create products and services quickly and efficiently. Going forward, we expect more collaboration between banks and fintechs to create new commercial models which can give us unique advantages when it comes to addressing the evolving client needs.
Given our involvement in the Africa financial industry, we are exposed to a huge set of data on the ground.
APIs have grown to be one of the most important channels for client communication and an important enabler for open banking. Ecosystem orchestration is about bringing the best and most efficient products and services to our clients, be it coming from Standard Chartered directly or via one of our partners. Our open banking strategy also allows us to collaborate more closely with our partners to develop new products and services.
Looking outside the financial industry, big tech companies have huge API stores published for external parties to use. Their API stores lead to positive network effects in terms of getting more clients and revenue. Standard Chartered has a suite of APIs which can allow clients or partners to get responses from us easily and enable faster integration between clients and the bank for transactions and reporting.
We are working very closely with clients to develop our APIs and have published several APIs on our API store including: settlement status, portfolio holdings, market news and funds reporting services. The Standard Chartered API gateway is integrated to our Enterprise Data Business. We also have a sandbox internally for third-party developers to experiment with. Having a sandbox is an essential step in encouraging clients and partners to use our APIs.
As a result of the growth of APIs across the industry, SWIFT has been very active in promoting ISO20022 as an API standard for consistency and scalability. They are also creating an API platform for banks to publish their APIs. Banks are increasingly adopting industry standards which are most likely to have a high take-up rate, as such at Standard Chartered, our APIs are mainly based on ISO20022 schema.
Standard Chartered has a suite of APIs which can allow clients or partners to get responses from us easily and enable faster integration between clients and the bank for transactions and reporting.
As part of the Bank’s innovation journey, we are constantly exploring internally for routine, repetitive and rule-based processes to be candidates for robotic process automation.
Examples of such automation developments include improvements made to capability in optical character recognition and straight through processing abilities including automatic FX.
Of course, automation is only possible if we can make sense of the data collected across daily activities. Rapid advancement in new technologies for data analytics and artificial intelligence are creating many performance enhancement and productivity efficiency opportunities while enabling the emergence of new operating and business models.
Advancement in technologies and automation will result in greater stress on transaction services fees and traditional custody fees. We need to continue to develop new business models to stay relevant and continue to make a difference in the post-trade space.
Big data, data analytics, AI and machine learning are closely integrated and the ability to convert raw data to enriched, economic data to cover market investor behaviour, risk analytics and regulatory obligations will be a differentiator.
At Standard Chartered, we are collecting data from both internal and external sources for data lakes and facilitating data consumption by clients and partners. We have also created a comprehensive data dashboard which is integrated directly with our data lake to offer a suite of widgets covering a 360-degree view of our clients and our markets.
We are engaged in data experiments to discover new information, for example, we have completed a detailed data analysis on MT599, a free format SWIFT message which requires manual processing and that enables us to identify areas of investment to improve efficiency and conduct data-driven conversations with clients for their cost savings and process improvement. Data-as-a-Service made available via our APIs and other channels will drive our client servicing capabilities to the next level.
We have our own strategic view of what our future will look like in 10 years and what we can do to continue to stay relevant. Collaboration with fintech companies and market participants, and investments in emerging technologies and innovative solutions are part of our answer to what we envision our role in Africa to be in terms of providing better and faster financial services to delight our clients.
