Consumer-driven Financial Services from FinTech
Information and communications technology (ICT) continues to evolve at breakneck speed, particularly with respect to networking and cloud-based services. In the financial services industry, ICT is at the heart of an exciting new development known as FinTech, a new mode of delivering financial services that is more highly customer focused. FinTech (a combination of Finance and Technology) represents a new wave of innovation in the financial services sector that capitalizes on advances in ICT, particularly around smart devices and Big Data.
Financial services are traditionally presented as general services that customers can apply for over the counter or via the provider’s website. With the advent of smartphones and cloud-based applications, however, there is increasing demand for tailored personal services that span multiple institutions and are available on call at any time of day.
FinTech is a new mode of providing services that encompasses multiple financial institutions such as banks, stockbrokers and credit card companies, and allows for flexible asset management tailored to individual requirements. For example, you can connect a card reader directly to your smartphone to enable instant credit card payments. All transactions are recorded in the history log in the cloud. For household budgeting, you can use your phone to take photos of receipts for purchases, which are converted automatically to data and added to a household database. You can then use the database to produce graphs that track your income and spending. These are just some examples of the convenient services that FinTech can provide.
First Regional Bank to Introduce mBaaS
Fujitsu is a leading partner in FIFJ,* a consortium of around 100 financial institutions and associated providers established in July 2015 to promote the FinTech movement and drive open innovation in the domestic financial services sector. In this role, Fujitsu will supply fellow consortium member Nanto Bank with the Smart Biz Connect for Finance (SBCF) cloud service. This represents the first time an mBaaS** open platform has been offered by a regional bank in Japan.
SBCF provides an overarching framework that enables efficient centralized operation and management of smartphone apps from multiple vendors, where common functionality (such as registration and authentication procedures and push notifications) resides in the cloud and is implemented via APIs***. (application programming interfaces; an API is a set of commands, protocols and functions). As the only domestic mBaaS open platform deemed compliant with the Security Guidelines on Computer Systems for Banking and Related Financial Institutions released by FISC (the Center for Financial Industry Information Systems), SBCF is able to provide privacy guarantees around the use of personal data. The mBaaS model supports multiple APIs for common functions and delivers savings of up to 70% on development and operation costs. Development lead times are also up to five times faster.
For Nanto Bank, SBCF represents a much simpler and easier common platform that supports smartphone apps from multiple vendors and provides ample scope to accommodate future expansion.
* Financial Innovation for Japan, a consortium of around 100 domestic financial institutions and FinTech providers committed to promoting open innovation in financial services.
** Mobile Backend as a Service (a form of PaaS), a service platform on cloud servers that provides basic smartphone app development and operational functionality such as authentication and push notifications. mBaaS significantly reduces development lead times and expenses since the basic functions are already supplied and available.
*** application programming interfaces;an API is a set of commands, protocols and functions
Designing New Financial Services
Fujitsu provides SBCF as an mBaaS on MetaArc, a digital business platform designed to support financial services apps from multiple vendors. Nanto Bank is the first regional bank to embrace SBCF, which is currently the only service of its kind in Japan to comply fully with the FISC Security Guidelines on Computer Systems for Banking and Related Financial Institutions.
Fujitsu is committed to promoting innovation in financial services through the FIFJ consortium and in particular with FinTech solutions and ICT platform development, with a short-term target of implementing SBCF solutions in at least 40 financial institutions over the next three years.