Banks and challenger banks alike are constantly making news with developments seeking to answers the challenges posed by the open banking revolution and changing customer expectations. Digitization is a catalyst for both these changes in the industry. Hence, banks are using digitization to propel development and stay relevant.

Global financial services company, UBS, has sought a patent in America for blockchain smart contracts. The patent discusses using public and private distributed ledgers to record every transaction that occurs with the Switzerland-based bank in the blockchain. Using both public and private distributed ledger technology (DLT) would ensure security and open banking requirements are met; smart contracts are on the public key, but confidential data is stored privately. The patent application is here. UBS is also leading the Utility Settlement Coin (USC) blockchain project which is being developed by a consortium of 12 major banks. UBS is taking blockchain seriously.

Groupe BPCE is France’s second biggest banking group. It is made up of Banques Populaires, Caisses d’Epargne, Crédit Foncier, Banque Palatine and most recently, digital bank Fidor. The group has announced a 600 million EUR digital transformation plan called ‘TEC 2020.’ BPCE aims to support 90% of clients in digital spaces by 2020. The large majority of BPCE’s business is in retail banking and insurance, so embracing digitization reflects the decreasing use of physical branches or human services by digital-native generations. The investment will focus on cloud, data management, automation tools and shared platforms. More details of the ‘TEC 2020’ digitization project from BPCE can be found here.

Recognizing the changing banking landscape, the European Banking Association (EBA) held an Open Forum on Open Banking on December 5th. The aim of the event was to promote discussion of open banking at a ‘pan-European and cross-industry level.’ HollandFintech CEO, Don Ginsel, was a co-moderator of the event which sought to bring ‘incumbent and new market players together in a collaborative and cooperative atmosphere.’

Also on December 5, the UK’s Financial Conduct Authority, released the list of participants who have been accepted into the third phase of their regulatory sandbox. This sandbox has already been a great success for development of fintech in London. Among the new participants are banks Barclays, Nationwide and first direct. The FCA’s website highlights the 18 businesses selected to be part of cohort 3 and what products the companies will test. While testing a varied range of products, a theme is the use of AI, blockchain and big data as the technology facilitating digital developments.

By Grace Appleford, Research Analyst for Holland FinTech.