Commerzbank: Open banking comes with far more opportunities than PSD2 has outlined
Christoph Berentzen is Head of API & Open Banking at Commerzbank. He tells Qorus about the German’s bank strategy and achievements in terms of open banking and API.
Christoph Berentzen is Head of API & Open Banking at Commerzbank. He tells Qorus about the German’s bank strategy and achievements in terms of open banking and API.
Can you tell me about your role? What does a ‘Head of API and Open Banking’ do? And also about your team – how many people, and what are their profiles?
In short, I am enabling Commerzbank´s delivery organization to provide API banking services, to increase the group’s IT efficiency and to create new business models adding customer value. Therefore, we are a highly motivated team of more than 100 talents at four locations in Germany, Poland and Bulgaria. And we were one of the first ‘tribes’ of the bank, working in cross-functional ‘BusDevOps’ teams in an agile setup.
In Europe, the PSD2 directive has made open banking possible and we are beginning to see the first results. Is open banking a danger or an opportunity for an incumbent bank like Commerzbank?
To me, open banking comes with far more opportunities than PSD2 has outlined, especially for the corporate sector. And at Commerzbank we definitely focus on these opportunities. Even though you need to think out of the box and step on some unexplored paths, which means it is a massive change in the business model. There are plenty of new competitors in the FI industry, like bigtechs, and pretty high expectations in customer experience at the same time. So, if you want to stay relevant with your customers in the future, you should open up as an incumbent.
Open banking leads to collaboration with other companies. How do you choose the companies you work with? What are the criteria that make a good partner? And what is the role of the Developer Portal in your strategy?
That is something we really wanted to understand, so we did some research and ended up with what we call the ‘4 component model’. If you want to achieve innovative solutions with user value, you need to match with your partner regarding the data exchange and corresponding infrastructure, as well as with a collaborative environment and cultural aspects. And we are open for collaborations on eye-level with corporates, fintechs and other partners, as long as it fits with our business model. Our Dev Portal developer.commerzbank.com is the central collaborating tool for all our partners and we built it to fit their individual needs – no matter if they are a consumer, provider or orchestrator.
Among Commerzbank’s innovative projects made possible by the use of APIs, can you tell me about one you are particularly proud of?
It is hard to highlight only one out of 300 APIs we have deployed so far. For internal use I would mention the Persons API. This API allows you to read, create and update data from legal and natural persons, which makes it easy to manage all Commerzbank customers´ personal information.
My favorite external API is the Corporate Payments API because this is both a B2B and a B2B2C use case. As a corporate or SME customer you can send transactions or receive account information directly from your ERP system, for example via EBICS. This enables our clients to process payments directly in their customer workflow, making payment transactions for all parties involved simpler, leaner and safer.
There is now a lot of talk about embedded finance, platforms, super-apps and ecosystems. What do you think the distribution of financial services will look like tomorrow?
The time is right for tackling these topics because banks are still trusted, but – as mentioned earlier – customer behavior and expectations have been changing. In my opinion banking needs to follow the customer, not vice versa. And customers do not care about the FS provider as long as they experience an easy, convenient and secure journey. Which means banks need to define their role in every ecosystem they participate in, even if they do not own the customer interface in some cases. That is why our open banking strategy includes our own platform and apps as well as embedded finance and BaaS offerings and digital ecosystems.
We talk a lot about tech for good but we can also talk about open banking for good. How can open banking have a positive impact on sustainable development?
Commerzbank is committed to becoming a ‘Net Zero Bank’ with a neutral asset portfolio and we recently released a white paper on how API technology impacts circular economy. We concluded that open banking – and in particular digital ecosystems – contribute to many new digital businesses serving a sustainable purpose.
In addition, open banking helps to increase customer awareness for a more sustainable lifestyle. We connected our mobile banking app with an external CO2 calculator via API, so users can experience some gamified finance-related education. For corporate clients, we prototyped a platform which combines finance overview with ESG monitoring. And that is just the starting point.
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