Progress in Open Banking: Swiss Financial Institutions Show Great Interest in Implementing OpenWealth API


Progress in Open Banking: Swiss Financial Institutions Show Great Interest in Implementing OpenWealth API

The participants of the Wealth API Roundtable at the end of October agreed: there needs to be a standardized asset management interface for the Swiss financial center. The first financial institutions are likely to implement the API standard of the OpenWealth initiative as early as next year. There are various questions that need to be clarified before then, including how to securely operationalize and efficiently scale the OpenWealth API.

A total of ten banks and two portfolio management system providers met at the Wealth API Roundtable at the end of October held by Synpulse, SFTI, and b.Link (SIX). The event kicked off the establishment of the OpenWealth API standard, which will be launched in a sandbox as version 1.0 in late November. The questions brought up at the meeting were both simple and essential:

  • What setup will be used to continue to run the initiative and expand the OpenWealth community?
  • How does a custodian bank link an external asset manager or a portfolio management system via OpenWealth API?
  • What operationalization specifics still need to be clarified?

A brief survey yielded positive feedback as well as clear interest in the initiative among all the participants attending (see chart). There was also mutual agreement on the motivation to actively address the need for a standardized interface in asset management. Accordingly, many financial institutions can imagine joining the OpenWealth community. The use cases presented by the OpenWealth initiative – such as including external asset managers (B2B) and providers of asset consolidation platforms (B2B2C) – are clearly regarded as relevant for the Swiss financial market. 

Voting results from roundtable survey

Voting results from roundtable survey

 

 

Based on the discussions during the Roundtable, various participants are expected to test the first use cases for the OpenWealth API starting next year. However, there are a few unresolved questions to clarify before then, including as regards content management, establishing confidence in the interface, and the community itself.

OpenWealth: Unresolved Questions Addressed by Specialized Committees

The governance and community of the OpenWealth API standard are orchestrated by Synpulse in close consultation with SFTI. In this connection, the Roundtable provided a good opportunity to promote OpenWealth and gain additional participants for the community in order to give the standard the broadest support possible in the market. In doing so, Synpulse stressed the importance of having all members actively contribute and work together to further develop the standard.

Synpulse also noted that an API standard alone is no help to anyone unless it is widely implemented and used. This is where SIX comes in by offering an efficient and secure option for financial institutions to implement the API standard via the b.Link open banking platform, which has been live since May. For participants that choose this method, SIX will create a working group to arrange both timing and content issues closely with the OpenWealth organization as part of the community (see chart).

 

Integration of b.Link into the "OpenWealth" organization for the coordinated implementation & further development of the API

Integration of b.Link into the "OpenWealth" organization for the coordinated implementation & further development of the API

 

 

Offering the OpenWealth API via b.Link: Major Scaling Potential for Banks and WealthTechs

There are a number of challenges and questions relating to implementing the OpenWealth API as well as linking third-party providers to the banks. This is where b.Link benefits from its experience with the current API offering in the area of SMEs and accounting software, which it can apply competently when it comes to interfaces in asset management. One thing we are particularly pleased with about this is that implementing OpenWealth via b.Link will now make open banking solutions available to private clients as well.

Implementing it and linking through b.Link offers several benefits for all parties involved. Thanks to an admission check, financial institutions no longer have to review third-party providers themselves. A standard legal framework also makes time-consuming contract negotiations unnecessary. Aside from this drastically simplified onboarding, SIX follows up by centrally handling complex partner management and support through b.Link. This represents a major reduction in the current work and complexity involved in forging successful partnerships between financial institutions and third-party providers. Once participants are on the platform, the network effects of the central hub kick in. With less work involved, partnerships can be efficiently and easily scaled.

 

A connection via b.Link reduces the complexity and effort while offering a large scaling potential.

A connection via b.Link reduces the complexity and effort while offering a large scaling potential.

 

 

The idea is for b.Link to allow financial institutions and third-party providers to jointly construct comprehensive ecosystems for their clients. The entire organization of SIX stands behind open banking and wants to actively promote its development in Switzerland. Our goal is to operationalize applications based on recognized, market-driven API standards supported by financial institutions and to link as many financial institutions and third-party providers with each other as possible. To do so, we are making long-term investments into the platform and continuously optimizing onboarding as well as the user experience of participants (cf. partnership with Luxhub).

What Comes Next?

Over the next few weeks, all the pending items regarding operationalization of the OpenWealth API will be assessed and evaluated under the leadership of Synpulse in close consultation with interested banks, SFTI and b.Link (SIX). A follow-up roundtable will pick back up on these items in early December.

Take Part in Our Webinar and Receive More Information on the Results of the Wealth API Roundtable

As announced in our latest blog post, we will provide more details on the OpenWealth community and governance as well as on the implementation via the b.Link platform as part of our “Open Banking by b.Link” webinar series:

Open Banking by b.Link: OpenWealth API webinar
Thursday, November 26. 12:00 noon – 1:00 pm

We invite interested banks, asset managers, and portfolio management system providers to contact us and register for the event. After the webinar, we would be happy to bilaterally discuss potential participation in the project.