How Tieto's APIs give European banks a competitive edge

Editor’s note: Today we hear from Tieto, a leading Nordic software and services company serving customers through smart adoption of technology and data use. Tieto offers services to businesses, consumers, and citizens in the Nordics and beyond with a global team of 15,000 employees in almost 20 countries.

Although we’re the largest system integrator in the Nordics, we also develop our own products, including our lending and leasing platform that we sell to retail banks across Europe. To compete with a burgeoning population of fintech startups, banks increasingly want to offer their customers a wide variety of customized services—whether their own or something provided by a third party. We want to make it easier for them to integrate with those third-party services and reap all the benefits. So it made sense for us to implement an API platform as a mid-layer between our platform and all the third-party integrations that a bank would want. We chose Google Cloud and the Apigee API management platform to make it easier for developers to find and consume the APIs that are available at our open banking API hub.

Gaining a competitive edge with Apigee
We chose Apigee for several reasons. Most importantly, we felt that Apigee offers better and more cost-effective service and support than other products we evaluated. On the technical side, the possibility of running both cloud and on-premises deployments gives us maximum flexibility for our customers, some of whom still run on-prem. We also really appreciated Apigee’s banking proxy with pre-developed API feeds.

Our first API-based solution is what we refer to as an interim credit platform. This means that we originate or underwrite a loan, administer it, and, if that credit turns bad, we manage the non-performing loan. We handle the entire credit lifecycle from origination to administration to collections (if necessary). From the retail bank customer’s perspective, they log in to their own bank’s mobile or web application and apply for credit, pay, and manage their loans entirely from their bank’s front end. In fact, they are really interacting with the Tieto solution for the entire life of the credit relationship.

We’re using the Apigee developer portal for our team of about 10 internal developers. We have  approximately 120 customers using between 20 and 50 APIs each, depending on individual needs for integrating with brokers, CRMs, ERPs, fraud detection systems, government reporting, and European open banking requirements. We like how Apigee works as a tool for monitoring traffic; it gives us visibility into things like the sales performance of individual brokers. And from a cybersecurity perspective, we are confident that the integrations we do through Apigee meet the highest security standards.

Monetizing open banking APIs
Going forward, we want to help our bank customers monetize through the Apigee platform. We’re convinced that even though it’s early days for open APIs in the banking industry,  most of our customers want to these capabilities. For the most part, banks haven’t started to monetize their APIs yet, but we predict that they’ll want to do so very soon. For us to be positioned to support our customers as they move from open APIs towards monetization is key.

We’ve had feedback from banks that have used other API platforms and have found that Apigee’s monetization capabilities are much more complete than what they’ve seen in other products. This becomes especially relevant when we talk about a common European model of multiple retail banks in one group that share a centralized IT function. With Apigee they are able to easily manage cost splits between the various banks in a group by looking at API calls, which isn’t always the case with competing API management platforms.

In the next nine months the European open banking regulations are set to be enforced, and we are helping our customers meet this important deadline. Aside from satisfying the regulatory requirements, we are seeing a lot of innovative applications as people start realizing the possibilities of APIs and begin taking advantage of their capabilities.

For instance, beyond meeting account information requirements, we expect to see true open banking happening on API platforms that will flow data from different endpoints, no matter where you’re accessing it from. If a customer is applying for a credit card, we’ll see his or her account information coming through from his or her bank, which would then flow to a credit agency for scoring, and so on. This means that the quality of the data will be much higher because it’s coming from already validated sources, rather than being self-entered by customers each time they make an application. With banking data being truly free and open, it’s going to be interesting to see how the market will develop.

To learn more about Apigee, visit our website.