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Case study

NDGIT and Hypothekarbank Lenzburg – the Swiss Open Banking story

Monday 17 June 2019 | 07:28 AM CET

Oliver Dlugosch, CEO of NDGIT, shares the ins and outs of how Hypothekarbank Lenzburg leads the way in Switzerland with its Open Banking platform powered by NDGIT

Hypothekarbank Lenzburg (HBL) has come a long way from its establishment as a loan house in 1868 to a digital universal bank that is now leading the way in Open Banking in Switzerland. With the help of API technology partner NDGIT, it has developed its own core banking system, Finstar, which is now open to third party providers (TPPs) and is the first Open Banking platform in Switzerland to match PSD2 requirements.

Staying ahead of the curve

Switzerland is a historically important financial market but lies outside the catchment of EU regulation. With the rest of Europe on the path to PSD2, traditional Swiss banks like Hypothekarbank Lenzburg realised they had to invest in next-generation platforms and services or risk getting left behind.

In 2017, HBL decided to develop its own open platform, to secure its competitive position and stay relevant and value-rich for consumers and business partners alike, as the new European financial ecosystem evolved.

To establish it as a ‘first mover’ in Open Banking, it sought a framework that would grant FinTechs authorised access to bank data and include a developer portal for easy marketing of its services. It also wanted to ensure its platform could match the requirements of PSD2, but at the same time would be very ‘Swiss’ and able to comply easily with the obligations of its local payment environment.

Creating a new platform

The bank selected NDGIT, provider of the first API platform for banking and insurance in Europe, to deliver the technological backbone to support the central interface between its new system – called Finstar – and its various FinTech partners.

This was a brave choice as NDGIT, although recognised as an open API pioneer, was a new provider to the Swiss market. However, NDGIT was able to design a flexible middleware that enabled the bank’s partners to connect easily with minimal effort through standardised Application Programming Interfaces (APIs) connected to the API platform.

Deployed on-premise on the bank’s servers, the solution was enriched by a secure and fast connection to the Finstar backend that allowed service distribution in both directions. This allows HBL to provide white label accounts for third parties like ‘neon’ and also makes it easy to obtain and process FinTech applications for value-added services aimed at bank customers.

Reaping the rewards

Marianne Wildi, CEO of Hypothekarbank Lenzburg, confirms, “Using the NGDIT platform, we have implemented the first Open Banking system in Switzerland, and can offer our customers a FinTech ecosystem. Digital innovators can profit from our white label banking.”

FinTech services are available in HBL’s online banking and can be selected by end users as in an App Store. The in-house core banking system "Finstar" of Hypothekarbank Lenzburg is now used by seven other Swiss banks and ten financial service providers like the virtual ATM provider Sonect.

The resulting FinTech ecosystem has grown steadily since its launch and now includes twenty different digital partners whose services enrich the customer experience of end customers and business customers in online banking. It is also delivering Banking as a Service for innovative start-ups such as neon, using white labelling services to help them offer customers their own branded bank accounts.

The joint project has received considerable industry recognition for its success including the Euro Finance Tech Award 2017 for the best collaboration between bank and FinTech and the Finance IT Innovation Award for an innovative ecosystem.

Securing a future in connected ecosystems

Oliver Dlugosch, CEO of NDGIT, says, “Our API-based platform is helping HBL to keep ahead of the curve in terms of banking innovation and services. It’s also future-proofing its operations by allowing its service-portfolio to expand and grow in order to keep pace with customers' continually changing behaviour and desire for new and better financial experiences.”

With the financial industry facing a period of intense disruption, Finstar ensures HBL remains market-ready and competitive. Its partnership with NDGIT means it is well on its way towards platform banking and its own connected ecosystem. This will open up new revenue streams from TPPs and other digital service providers who want to take advantage of HBL’s customer base, reach and reputation.

About NDGIT

NDGIT GmbH stands for Next Digital Banking and provides the first API platform for banking and insurance. Its business-ready platform technology serves as the link between banks, FinTechs and digital services and enables migration to platform banking and new financial ecosystems. NDGIT enables banks to open up to digital partners with PSD2 and Banking APIs. The NDGIT FinTech platform forms the technological backbone for new applications and IT landscapes in banking and insurance.

About Oliver Dlugosch

Oliver Dlugosch serves currently as the CEO of NDGIT, provider of the first Open Banking platform. He’s a digital banking expert focusing on the banking transition towards a 360° customer-centric experience. For that purpose, he repeatedly digs deep into the technology of platform banking without even knowing to code.

 

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