The open banking ecosystem
The open banking era has just begun and, due to the PSD2 regulations, the tech providers are starting to create innovative and visionary ways to meet and to ease the banking sector’s must to compliances.
To easily visualise all that the open banking ecosystem means, check out this comprehensive diagram shared by Deloitte in How to flourish in an uncertain future Open banking and PSD2.
This means that new technology firms recognising opportunities in financial services will be able to compete on a level playing field with traditional financial services and banking institutions. These Fintech newcomers will be able to access customer accounts and make payments on behalf of customers using: 1. API‘s – which account holding institutions will have to give fintech companies access to and 2. enhanced security through SCA – Strong Customer Authentication (such as Two Factor Authentication). These players also have names (or acronyms). They are TPPs (Third Party Providers), ASPSPs (Account Servicing Payment Service Providers), AISPs (Account Information Service Providers) and PISPs (Payment Initiation Service Providers).
The road to a solution provider
IT Smart Systems is a traditional IT service delivery provider, working with partners across Europe since 2002. From 2018 it started developing its own PDS2 cloud-native solution, a Hub created on the IBM API Connect Platform. API Connect is a market-leading API management solution that enables automated API creation, a simple discovery of assets, self-service access for developers, and build-in security and governance. The Hub is called SmartPG (Smart Payment Gateway), and ‘it tries to bring something new technologically and methodologically’, claims Andrei Rizea, Scrum Master, SmartPG Project. SmartPG is all about meeting and dealing with PSD2 challenges, is created precisely to simplify the account information access and to ease all the payment flows, in the benefit of the final consumer.
For all this to happen, the IT Smart Systems team developed immensely lately: ‘We try to innovate and experiment as much as we can. We are carefully reviewing every feedback and take into consideration any idea that could benefit the product. The team acquired different secondary skills: API Connect, UX/UI, Agile, SpringBoot, iOS, Android.’ (Andrei Rizea, Scrum Master, SmartPG Project).
It is definitely a challenge this road to a solution provider, but it seems that the core vision of ISS
worked: ‘I strongly believe, looking at the past, that our recipe for success resides in both our stubbornness in being always capable to implement what the customer needs, but also in what we call 'intrapreneurship' - meaning that each of our colleagues is invested with trust to do things as he/she feels fit, to innovate and adapt so that the proposed goal is reached and, of course, he/she evolves along with it as well. We grew and grow up together, actually! And this is the best example - the seed for our solution appeared exactly in this way, all we needed was the right spark and then we rapidly teamed up to implement it. With such a great enthusiasm!’, declared Mihaela Georgescu, Senior Partner, Organisation, Innovation & Change.
So, as it seems, the next logical step was the launch of Smart FinTech, and under its umbrella IT Smart Systems is planning to develop all its brand new and interesting openbanking solutions.
Our Smart Payment Gateway challenges
SmartPG is a PSD2 compliant API Hub that enables Banks and Merchants to accelerate electronic payments. Challenges? As one of the managers, Daniel Slavic, put it: ‘the first challenge is the PSD2 in itself, due to the fact that it brings functional regulations, but technically it leaves room for interpretations as how these regulations are actually implemented; consequently, each bank will lay out its own interpretation of ‘different’. From the other perspective, we feel the local banking market and business are sliding slightly behind with the PSD2 adoption and in openbanking mindset. So we are expecting [to meet] a reluctance, even from the clients perspective (retail, e-commerce), who are used to pre-build products.’
Our Smart Payment Gateway advantages
But things are looking good, as SmartPG brings to the table its own advantages and innovations. ‘The main advantage of this Hub is that it simplifies immensely for the third parties/retailers the integration of services offered by the banks once PSD2 is installed. As said before, the specific regulations are pretty vast and leaves it up to the banks to choose the implementation model; consequently, when ‘live’ on the market, a multitude of particularities will have to be learned by those willing to integrate them in their platforms. We actually come to their aid through the normalisation within our Hub of all this particularities, with the result of something that is easy to implement and the guarantee that it is totally PSD2 compliant; as a plus, we put a great focus on security’, argues Daniel Coman, Manager, e-Commerce & Identity Management.
The competitive advantages about SmartPG go beyond that. ‘SmartPG is a cloud-native solution that brings great scalability, best in class resilience, and really fast time to market; moreover, the platform offers dedicated accelerators to speed up adoption for both ASPSs and TPPs’, explains Andrei Dumitru, Executive Partner, Innovation & Technology Services.
Our Smart Accelerators: SmartPay and Pay4me
Wait? What? Accelerators? Well yes. These are our own build, developed, innovative products that come as an extension of SmartPG, powered by our Hub. SmartPay and Pay4me add brand new payment alternatives that the customers can use when they complete an online order, from the web or mobile applications. ‘The mindset and modular architecture principles that we carefully follow create a platform that accelerates the adoption of PSD2 in a secure, performant and flexible way from the point of view of integration through different packages of licence: basic (just for access in the API Hub) and an extended one (that includes graphic widgets for mobile and web)’, comes to explain Daniel Slavic, Manager, e-Care & Mobility.
So, keep this in mind please: SmartPay is an e-commerce payment accelerator for Merchants offering a plug and play solution in the context of PSD2 integration, whereas Pay4me is an accelerator for customers to delegate payments in a simple and secure way.
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