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Navigating Financial Transformation: CBI’s Innovations in Open Finance

In an era defined by technological disruption and regulatory evolution, the financial services landscape has undergone a profound metamorphosis. As the world grapples with the ongoing digital revolution and the challenges posed by the global pandemic, the industry has witnessed a remarkable transition from traditional models to more open, interconnected systems.

Amid these changes, Liliana Fratini Passi, managing director of CBI, an interbanking company that develops cross-border digital payment services, offers a compelling exploration of the journey from open banking to open finance, shedding light on the collaborative efforts, innovative strategies and transformative potential that are shaping the future of financial services.

Liliana Fratini Passi, managing director of CBI,
Liliana Fratini Passi, managing director of CBI

The financial services industry has seen profound technology-led changes over the past years, experiencing a ‘revolution’ due to the impact of new paradigms based on ‘open’ models. Furthermore, the Covid-19 pandemic has accelerated the adoption of information technology within critical infrastructures, production processes and the private lives of citizens. The pandemic has pushed not only financial institutions to increase their investments in innovative technologies but also to develop legislative regulations to strengthen security.

Open banking started to spread in Europe mainly as a consequence of the regulatory boost introduced by the Payment Service Directive 2 (PSD2), which aimed at creating the conditions for innovative ‘open’ models to flourish in the financial services industry.

Following this prevision, the adoption of open banking started to rise in the Italian market with major banking players updating their offering with basic open banking services in response of the ever-rising pressure of digital banks and fintechs, as well as non-banking players exploring the boundaries of open banking to find new revenue streams (e.g. utility providers integrating payment initiation services into their systems).

These initiatives helped to achieve a dynamic context where players often cooperate in an ‘open’ framework to reduce their time to market and stay ahead of competition with cutting-edge services and a frictionless user experience.

Transition from open banking to open finance

More recently, following the growth of APIs and the arrival of new regulations, a transition from open banking to an open finance ecosystem is occurring. Open finance can be defined as the extension of open banking, which translates into a wider sharing of financial data (no longer just payments ones) among players in financial services (not only banking ones), enabling third-party access to an increased range of services/products in addition to an enrichment of more complex services tailored to customer needs.

According to the Global Open Finance Report, written by CBI in collaboration with PwC Italy the open finance ecosystem will enable customers to have a single point of access and insights to all aggregated financial functionalities needed to operate on a daily basis, enabled by advances data analytics and comprising savings and spending across different bank accounts, monitoring of different investments portfolios, fast access to loans, easy comparation of offers bank-side and insurance-side, and many more.

In this regard, the experience of the Italian financial industry has demonstrated that collaborative ecosystems – such as CBI – are the most efficient and effective tools with which to achieve both compliance and continuous innovation through collaborative action.

CBI is a public limited consortium company and since May 2023, has become a benefit corporation, marking its commitments towards greater sustainability. CBI comprises 400 banks and other intermediaries as shareholders, that develops infrastructures, innovative services and ecosystems for the financial and banking industry, supporting digital payments, open banking and open finance; services that CBI customers, banks and fintech, ultimately extend to a wide set of clients, responding efficiently and effectively to the needs of business, public administrations and citizens in an increasingly competitive market.

Network economy

CBI develops collaborative infrastructures, digital services with a business-to-business-to-customer (B2B2C) perspective, acting as a fintech with 30 years of history, to help its customers to offer their clients – corporates, retails and public administration – innovative payment and information services.

Its greatest accomplishment lies not only in the development of innovative platforms and services, but moreover in its capacity to aggregate various actors in the financial ecosystem, benefiting from the advantages of the so-called ‘network economy’.

Emerging new technology is paving the way for disruptive innovation in the area of payments.  In this regard, CBI believes that a flexible, modern and clear approach is needed to respond to market demands.

To this effect, CBI has supported the PSPs to meet all the PSD2 requirements, creating a regtech platform called CBI Globe. In addition, two years ago CBI launched the ‘CBI Globe – Active Functionality’, that enables PSPs to play an active role as third-party providers, using a single access point to reach the entire Italian banking market and main international API platforms across the Single Euro Payment Area.

From a business-to-business-to-customer perspective, CBI Globe Active Functionality allows PSPs to strengthen their commercial profile vis-à-vis their corporate and final customers.

Furthermore, CBI is committed to invest in integrated and sustainable technological innovation and digital skills, which will contribute to a range of new value-added-services (VAS). The first value-added service developed by CBI in the open banking paradigm is the ‘Check IBAN’ service, first in the public administration and then in the private sector with an anti-fraud purpose.

The service allows verifying the correct correspondence between Tax Code/VAT Number and IBAN Code. So far, CBI has registered a growth rate of 120 per cent weekly, in addition to reaching the majority of the Italian market. These results confirm the great potential of the service and how its market share will increase even more in the upcoming years.

Innovative solutions

More recently, CBI launched the ‘Check IBAN Cross border’ service, to support banks and fintechs by offering the Check IBAN service to customers outside of Italy. The service enables  real-time checks on international entities by enabling cross border corporate checks, using the VAT proxy and IBAN code.

Similarly CBI has developed ‘Name Check’, a Confirmation of Payee (CoP) service that validates the ownership of an IBAN in relation to payee name through a search function based on the name/denomination of the account holder/company and the IBAN code linked to its own account.

This service could be adopted to avoid misdirection/fraud attempts increasing the payment market security, stability and efficiency. It is useful in cases where VAT and fiscal codes are not available, for instance in case of instant and P2P payments. Furthermore, it can be stated that the Name Check service has been drafted to be compliant with the new Payment Services Package – which includes a Directive (PSD3) and a Regulation (PSR) – to build on the progress made since PSD2.

Data has indeed showed that until now, prevention measures, such as SCA, have resulted insufficient to prevent frauds. In this regard, PSD3 and the new services offered, such as Name Check can play a vital role in tackling new types of fraud – such as spoofing- that are emerging from high tech.

Another relevant service offered by CBI is ‘CBI GO’, which simplifies the onboarding process of a corporate or retail user through recognition with strong authentication (SCA) and the consequent transfer of data from the Intermediary with which the user has a current account relationship to the Intermediary offering the service to companies and businesses. The service offers a shared data set with a format that can be modulated according to business needs and the use case implemented.

In conclusion

Despite open finance being a recent phenomenon in many countries, several players are looking at evolving their offering beyond open banking and towards an open finance ecosystem as depicted by the recent documents issued by the European Commission.

CBI in its role of forerunner and first mover company, acting as industry utility in support of a more effective financial ecosystem, has entered new partnerships in the field of open finance and will continue to investigate new collaborations that deliver sustainable impact.


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