Banks could reduce costs by processing more payments and activity of their rivals’ customers if they made more use of standardised technology, an advocate for technology standards has claimed.
SAP global head of banking industry development Don Trotta said that greater standardisation could lead to banks processing basic activity in branches in the same way that banks’ ATM machines process the requests of rivals’ customers.
“Moving to a more standardised and industrialised approach in financial services would have deep implications from a cost, quality and choice point of view,” Trotta said. Trotta is the current vice chairman of banking IT standards body the Banking Industry Architecture Network (BIAN).
Trotta also said that banks’ IT systems would perform better and experience fewer outages and glitches if the financial services industry adopted the new open IT standards. He said that banking IT standards would help to simplify the process of upgrading and maintaining legacy systems.
BIAN is a standard-setting body with a membership of more than 40 banks and IT companies, including Deutsche Bank, ING, Microsoft and SAP. BIAN aims to reduce the costs banks and their IT suppliers face in integrating banks’ IT systems. It also promotes a flexible “service oriented architecture” in the banking industry.
BIAN has identified hundreds of services that could be standardised within banks, he said.
“The benefit of belonging to BIAN is that you can influence the standards [in their development stage] and how they come out,” Trotta said. “There are approximately 12 working groups who are crafting the standards and putting them to a rigorous review process.”
Trotta conceded that as BIAN grows and IT banking standards become more relevant, the organisation would need to engage more with financial regulators on the work it is doing.
In the Netherlands, though, BIAN is hoping to gain regulatory approval for what it is doing after a Parliamentary committee in the country, the Dutch Banking Structure Committee, endorsed the development of banking IT standards as a way to help banks reduce costs and improve on the quality of IT services, he said.
