Citibank evolves IT architecture for open banking

Citibank shares what it takes to transform one’s IT architecture to support openA major trend today among companies in the middle of their digital transformation journey is opening their APIs to external partners to speed up the creation and delivery of new digital services to their customers.

Nowhere is this trend more evident than in the banking industry, which is now riding the wave of disruption brought about by the advent of Fintech services pioneered by startup companies. Fintech services have been reshaping how banking services are delivered and consumed.

“The time of the fortress mentality is gone. It is time for banks to open up and play with the enemy. We need to ‘Fintegrate’ with startups to build new experiences. And a major component to that is by opening up with API,” said Sanjeev Mehra (pictured), managing director and head of global product development at Citi Singapore.

Mehra was one of the keynote speakers during the Tibco Now conference held in Singapore in late March.

Quoting some recent industry figures, Mehra said 35% of banking revenues are at risk because of disruption from Fintech.

“Digital partnerships and APIs are the currencies of the new economy. There is a paradigm shift in the banks’ sales and distribution modes as third parties will create a new source of revenue for the banks. Business will come from channels that do not exist today. Strangers will be your best friends,” he said.

Citibank is one of the first banks to embrace Fintech and opens its APIs to external developers.

In October 2015, the bank launched Citi FinTech, which was tasked to focus on building a smartphone-centric business model by creating and improving mobile-first capabilities across a range of banking services.

Last November, it launched the Citi API Developer Portal as a platform for developers to connect to the bank directly. The portal was initially made available in Australia, Singapore and the US. In the first five months, the portal had recorded over 4,000 registrations. The bank made the portal available to the Hong Kong developer community in March.

Preparing the enterprise infrastructure for open APIs

For Citibank, taking the Fintech and open API route means evolving its IT architecture for open banking – which it calls a “multi-speed architecture”.

Mehra explained: “A multi-speed architecture decouples slow-moving traditional back-end product processors from rapidly evolving customer-facing frontends. APIs enable this by encapsulating the business logic and orchestration of various backend services that are required to deliver a desired customer experience.

“This allows front-end developers to focus primarily on the user interface design and functionalities as well as customer experiences. The APIs become lego blocks that can be assembled to deliver better and new customer experiences without having to go through time-consuming back-end changes.”

In transforming traditional IT architecture in order to support open APIs, Mehra said companies should go for incremental changes that accumulate over time and not to expect big IT budgets to achieve this goal.

“You cannot stop your business to replace the entire architecture. You have to keep doing it as you go along,” Mehra said. “You need to work smart by leveraging agile methodologies. This means working and changing things incrementally as we work towards the ideal go-to-state.”