Building your third-party ecosystem, fast and secure

Frank Hamerlinck
Mar. 4, 2020
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Do you have a pond in your garden? Or a small stream running through your property? Then you have probably noticed how full of life those environments are. Different species live peacefully side by side, and each organism has its place and function.

 

Building ecosystems is a must for retail banks.

Simply by being together, they make each other stronger. That is the point of ecosystems, and that is also why in business too, every organization is building ecosystems or becoming part of different ecosystems. Making ecosystems work in nature seems simple. In business, a number of obstacles need to be removed first. Finding a secure, trusted way to collaborate is one of them.

To quote Charles Darwin’s ‘The Origin of Species’: “In the long history of humankind, those who learned to collaborate and improvise most effectively, have prevailed.” It is our belief that this not only applies to our fate as a species, but to how our economy thrives too. Digitization has made our society change faster than ever, and it is virtually impossible for companies to keep up with all transformations. Companies need to specialize to survive, but specialization is a double-edged sword: specialization is good but, at the same time, a specialist will always be only one part of a broader solution. That makes networking with partners inevitable.

Banks become one-stop-shops

An excellent case of ecosystems is the way retail banks are currently extending their portfolio of services. Of course, a retail bank offers financial services such as checking and savings accounts, mortgages, personal loans and credit/debit cards, etc. But how can banks differentiate if every other bank presents a virtually identical suite of services to consumers? Adding extra services is an excellent way of standing out from the crowd. That’s why banks are now enriching their offering with in-app services from third parties. To cite just a few examples: access to public transport services, ticketing services, or even connections to plumbers and other specialized handyman services.

This broad spectrum is exactly what consumers are looking for. We all lead such busy lives that we prefer one-stop-shops that can build a complete solution for us. To take the example of a young couple who want to buy a house. Previously they turned to the bank only to get a mortgage, nowadays, they probably expect the bank to go further than that.

When it comes to buying a house, a bank that can take care of as many aspects as possible (utility deals, moving services, cleaning services, renovation advice) will be preferred to one that offers only a mortgage. Customers want to be helped on their entire journey. This evolution turns retail banks into ‘supermarkets of services’.

Building ecosystems comes natural to banks

For banks, an ecosystem has numerous advantages. For one thing, it’s a great way of building a loyal customer base, as customers will keep coming back for different solutions. Ecosystems are also a good defense mechanism against fintechs that specialize in just one aspect of the banking marketplace. Especially banks that are already strong in one specific domain will see the benefit of building an ecosystem, as they have little room for expansion within their current market. In fact, offering these extra services is something that should come naturally to bankers, who have always been keen on expanding their share of wallet with a customer by selling extra financial services such as savings accounts, pension funds, stocks,… And besides: PSD2 forces banks to make customer data accessible to third parties anyway. All the more reason to benefit from this obligation for open banking.

Trusted hub

Key to making such an ecosystem work: trust. A retail bank can only become the beating heart of an ecosystem if the bank is trusted by its customers and its networking partners. When customers trust the bank, they will automatically also trust the third-party services it is promoting. By building their systems in a smart way, banks should be able to connect partner offerings as seamlessly as possible. Once a customer is using the banking app, he/she should not have to enter credentials again to access third-party services offered by the bank. Single sign-on and Federated authentication should be the norm. Unfortunately, this is not yet the case and even within their smartphone app, banks present different services as silos, obligating customers to subscribe before they can buy a ticket or contact a plumber. Sometimes consumers have to key in basic information (address, phone number,…) which the bank already has in its customer database. Goodbye, seamless customer experience!

Fortunately, it doesn’t have to be that way. ‘TrustBuilder Identity Hub’, the world’s first flexible platform for Identity and Access Management (IAM), was specifically designed to operate, collaborate and facilitate within a vibrant and varied landscape of tools, hard- and software created by different vendors. TrustBuilder Connectors bring plug-and-play connections to a host of service providers and identity providers. TrustBuilder Identity Hub offers a graphical user interface, policy-based user journeys and visual workflow creation, thus allowing users to seamlessly connect new ecosystem partners. The hub acts as a centralized access portal for all applications and leverages the collective innovation of an entire industry. This makes adding third-party services a walk in the park. Security and customer experience go hand in hand. To further protect consumers and ensure GDPR compliance, customers can give or revoke their consent for sharing personal data to one or more applications.

Just as banks are the trust broker in an ecosystem, TrustBuilder Identity Hub is the central hub where trust is supported and protected.

Interested in building out an ecosystem that is both secure and user-friendly? Contact us and we will ensure that your banking ecosystem thrives, just like the ecosystems in nature.

As co-founder of global trade management leader Porthus, customer experience platform NGDATA, and strategic consulting services company innacco, Frank embodies the entrepreneurial mindset. His 20+ years of ICT experience is complemented by his position as ‘Entrepreneur in Residence’ at iMinds and coach at Netwerk Ondernemen.

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