Nations Trust Bank debuts Open API Banking in Sri Lanka

By Rahel Kirinde

Nations Trust Bank (NTB) yesterday announced the launch of Open Banking for the first time in Sri Lanka.

Open Banking is a form of digital banking which facilitates the use of Application Programme Interfaces (API) which enable partner systems to build their operations around the relevant financial institution while ensuring financial transparency and the use of open source technology.

NTB’s Open API Banking clients can integrate the bank’s services directly into their own systems and create an efficient communication system between the bank and their own operations.

“The future of banking lies in being one of safe public places, transparency and inclusivity,” said NTB CEO Renuka Fernando. She added that collaboration would be the key to staying relevant as a bank in the current digitally-driven world. 

“Our initiative to launch the Open API Banking platform will enable integrated third party systems to lead itself to a framework for collaborative innovations and accelerated progress,” said Fernando. 

She also mentioned that Open API Banking would open up a whole new array of opportunities to start-ups, large corporations, SMEs, independent app developers and tech savvy individuals in their businesses and even day-to-day lives by providing services such as ERP automation, cash flow management, online purchases, fund transfers, payments and white labelling services.

To clarify any issues with security and the confidentiality of information being maintained, NTB Chief Operating Officer Thilak Piyadigama said: “Open Banking is as safe as internet banking. The security we have implemented on our platform is PSD2 which is a software directly issued by the European Union for Open Banking APIs.” 

He pointed out that John Keells Holdings had already adopted their Open Banking APIs and had begun integrating the systems of all Keells Super outlets with the NTB systems.

“Currently we have used the FriMI API bundle available through Nations Open API Banking to directly integrate FriMI payments with our POS terminals at our Keells supermarkets island-wide,” said John Keells Retail Sector Head Charitha Subasinghe. He explained that FriMi customers can now pay for goods purchased at Keells Super outlets directly with the FriMi app.

FriMi is a digital and lifestyle partner app launched by NTB in June 2017. It is known as the first digital bank of Sri Lanka as it allows users to maintain a fully electronic bank account which is also considered a savings account at NTB.

Speaking of the benefits that Open Banking brings to the SME sector, NTB SME Banking Vice President Bandara Jayathileke said: “Especially when considering the lending area of SMEs, Open APIs can be used to gain accurate credit worthiness assessments because the banks will have liberal access to the financial status of the business.” 

He also noted that Open APIs could in fact increase the profitability of SMEs because they would no longer require the services of a middleman in point of sale (POS) transactions.

The availability of Open Banking in Sri Lanka creates a whole new window in the financial sector. At a consumer level, an important area will be the electronic payments facility. Using Payment APIs, retailers can now integrate their POS systems with the bank’s systems to allow customers to pay directly from their bank accounts, which means lower transaction costs. 

Corporates will be able to simplify their payroll process by integrating company systems with the bank so that employees can be paid directly, without separately updating company-side systems and then using internet banking and sending instructions to the bank. 

Startups will also receive assistance in the form of getting access to customer data, helping in the proper identification of market opportunities and even obtaining third party financial services.

As more banks begin to open up their systems to Open API Banking, customer credit worthiness for lending will be easily accessible, information will be easily available and customers will be able to secure the best rates and terms. Managing money across accounts at different banks will also be possible through a single access point. Pix by Upul Abayasekara