Building an Open Banking marketplace for innovation
Bank Leumi saw Open Banking as the start of a revolution in how banks develop products, create customer value and collaborate. To seize this opportunity it launched FinTeka, a company that delivers specialist solutions for the fintech community. In this blog, Dean Clark (CTO, GFT UK) analyses how GFT and FinTeka partnered to develop a ground-breaking financial API ecosystem.
As the largest retail bank in Israel, Bank Leumi has a proud heritage and is committed to remaining at the forefront of innovation. The bank perceived the arrival of Open Banking as a revolutionary and unique business opportunity to build a vibrant ecosystem of new technical partners and customers.
On 15th June 2022, Bank Leumi launched FinTeka, a dedicated Open Banking subsidiary. The aim was to establish a new, agile fintech culture and to simplify communications with its external developer community. In practice, FinTeka sought to create an API marketplace that would bring Bank Leumi’s Open Banking strategy to life.
With the right technology, FinTeka, powered by Leumi, aimed to offer external developers easy access to a rich portfolio of open APIs so they could create new, exciting customer experiences. But to achieve this quickly it needed an experienced technical partner with the right tools to accelerate progress and deliver the solution.
Following a comprehensive market survey, FinTeka chose GFT as its delivery partner. With a proven portfolio of solutions, thriving partnerships (including one with AWS), and a flexible service culture, GFT had the ideal profile to help FinTeka deliver success.
GFT and FinTeka joined forces to:
- Deliver a dynamic marketplace to support Open Banking APIs and future services
- Enable Bank Leumi to build an active external developer community
- Provide a ‘sandbox’ environment for developers to test their innovations
- Facilitate premium subscription models to generate new revenue streams
Building on the cloud
FinTeka realised that cloud was the baseline for success and that most fintechs already used AWS, and with its robust API framework, GFT could offer a practical solution quicker than building from scratch.
The GFT Open API Framework (OAF)
As a serverless architecture running on AWS, OAF offered a fast, proven way to build, manage and share APIs safely and securely. Key components include:
- API Gateway to manage APIs systematically and automatically with integration and control through a single interface
- AWS Web Application Firewall to ensure safe accesses, avoid a wide variety of cyberattacks and to protect endpoints with mechanisms recognised by international security regulations
- AWS Kinesis Firehose to view, monitor and control API consumption in real-time, facilitating ticketing, indicators and visualisation of usage trends
- KMS and Secrets Manager ensures all credentials used by the solution are stored securely, whilst the AWS Key Management Service guarantees the creation and management of cryptographic keys
The OAF solution had been continually proven in several harsh commercial environments, so GFT was confident that Bank Leumi would be able to meet its objective of releasing new APIs frequently but in a controlled manner.
Although the initial regulatory requirement in Israel was for seven APIs to facilitate data sharing and account aggregation, Bank Leumi’s business strategy was to expose hundreds of APIs across a range of banking and cyber activities.
From the outset, both companies worked shoulder-to-shoulder, with weekly progress meetings. GFT had a dedicated team of up to 14 specialists, working in two-week sprints.
A vibrant fintech community
FinTeka, powered by Leumi, heralds a new dawn for Open Banking in Israel. The new platform was built in 8 months and so far 16 compliance certificates have been launched to individual fintechs.
Fintechs have ready access to a sandbox developer environment which is certified by Bank Leumi. They are able to consume APIs, develop new customer proposals and achieve regulatory compliance in parallel. This shortens time-to-market and simplifies evaluation and prioritisation of business proposals.
Open Banking regulation in Israel is following a similar pattern to the UK’s Open Banking initiative, which began in 2017. Whilst initial requirements in both jurisdictions were to empower customers with aggregated account data across multiple banks, the business opportunity is really to transform innovation and service delivery. Bank Leumi has already taken Open Banking to the next level, with loans and savings information and digital identification services for customers, for example with insurance disbursements.
With over 2,000 developers involved, Bank Leumi has created a digital ecosystem for extensive fintech collaboration. New APIs are added constantly, building a rich service portfolio and an expanding pool of Open Banking talent that benefits everyone.
A huge ‘congratulations’ are in order to everyone from the team at GFT for making this project such an overwhelming success. This includes the experienced UK retail banking team who made a significant contribution!
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