North American financial institution CIBC, Brazil-based banking institution Itaú Unibanco, National Australia Bank (NAB), and British banking firm NatWest Group yesterday announced the launch of the Global Open Finance Challenge, a virtual event inviting entrepreneurs and innovators to prototype customer solutions for a global open finance ecosystem.

While open banking, a financial technology term that refers to the use of open APIs that enable third-party developers to build applications and services around a financial institution, continues to gain traction around the globe, foundations are being laid for the next step in the open banking journey: open finance. The challenges associated with open finance are similar to those of open banking but with a key focus on data access, the misuse of data, appropriate consumer protections, and a growing need to build trust with users.

The customer solutions that the banks are looking for

The Challenge participants must build prototypes that are capable of addressing issues faced by the financial services industry in cultivating an open finance ecosystem that allows secure data sharing among financial institutions. These solutions should also be aimed at enabling banks to deliver more choice and customized product offerings for clients around the world, and the public at large. 

The banks have identified three areas the participants may choose to focus on, posing the following questions:

  • How can we better serve our corporate and business customers, and the public at large, by delivering high-value digital services?
  • How can we help current and new customers access banking services through more convenient or relevant digital channels?
  • How can we find innovative ways to help our customers make better decisions around climate and sustainability?

How will the challenge run?

The Global Open Finance Challenge, created by the four banks in collaboration with Amazon Web Services (AWS) and Oolys, an API infrastructure platform for financial service providers, is inviting fintechs, large global organizations, early and late-stage startups, universities, and other teams of innovators to register here to participate.

The banks have worked with Oolys to develop a sandbox environment that securely runs on AWS. This environment replicates a bank’s existing infrastructure, enabling rapid testing with third parties in a safe and secure environment. To support the development of applications, each bank will provide a set of shared APIs, including a combination of open banking, open finance, and experimental services. 

Participating teams can test, build and validate solutions, with mentorship from leaders within the banks and event partners. AWS will collaborate with the banks to provide participants with advisory support, including access to coaching and resources on innovation and product development, to help them build their concepts in the lead up to the judging event. 

“Financial services companies across the globe are going through rapid digital transformation. By encouraging builders and crowdsourcing new technological ideas, these forward-looking banks running the Global Open Finance Challenge will be able to develop new technologies to meet people’s rapidly evolving banking needs. We look forward to collaborating with the builders in the challenge to deliver tangible solutions that help people around the world meet their financial goals,” said Werner Vogels, chief technology officer, Amazon.com. 

What’s in it for the winners?

At the grand finale event scheduled to take place in November 2021, the top 12 teams will be given an opportunity to present their ideas to an executive judging panel consisting of the chief executive officers of the four banks, plus executives from private equity, venture capital, and technology organizations. One winner in each of the three key areas, and an overall Challenge winner will be identified. Each winning team will have the chance to participate in a post-event tailored incubation programme with one or more of the banks, which will include:

  • Proof of concept of their solutions with the banks: a dedicated in-bank team will collaborate on and support a proof of concept, including feedback from front-line and customer research groups.
  • Ventures pitch: post-event teams will have the opportunity to pitch to all of the banks’ ventures teams.
  • Local market guidance: post-event, teams can receive exclusive meetings with in-bank teams for education on local market environments.
  • Senior leadership: exposure to internal decision-makers for networking relationship support and partner discussion.
  • Solution architecture: Consultants from AWS will provide support on functional and technical designs.

“The Global Open Finance Challenge will help transform our industry around the world by encouraging innovation and advancing our common goals: to support our clients in an evolving landscape through value-added digital services, more convenient access to the financial ecosystem through the channels customers want, and a continued focus on sustainability,” Victor Dodig, president and chief executive officer of CIBC; Milton Maluhy Filho, chief executive officer of Itaú Unibanco; Ross McEwan, group chief executive officer of National Australia Bank; Alison Rose, chief executive officer of NatWest Group, said in a joint statement. 

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