NatWest’s Journey to API-Enable All Customer Payments Journeys

The use of application programming interfaces (APIs) in banking is growing, making it critical for financial institutions to develop a strong API strategy to integrate with third parties and business partners. 

In fact, “there’s an opportunity to API-enable pretty much all customer journeys,” Claire Melling, NatWest Group head of Bank of APIs told PYMNTS in an interview, adding that financial institutions (FIs) can play “a key part in smoothing out those journeys” given the many interactions they have with customers. 

And the opportunities are endless, be it in traditional banking activities such as payments, loans or home buying, or data sharing. “There are opportunities everywhere and as trusted organizations, we have a part to play in [offering those solutions to] our customers,” Melling added. 

Delving deeper into her role at NatWest, she touched on three main areas she is focused on, including creating API standards to meet regulatory standards like open banking and the European Union’s Second Payment Services Directive (PSD2).

“We’re [also] looking at how we can go above and beyond those mandates,” leveraging open banking and other regulations “as a mechanism to API-enable the organization,” she explained.

That means finding areas where NatWest can API-enable certain customer journeys to deliver value for its customers using customer attributes, direct access to commercial customers and variable recurring payments (VRPs), which are a new form of payment instruction in the U.K. enabling customers to consent to payment providers making payments on their behalf.

When it comes to customer attributes, Melling said that the bank had created a service that not only enables customers to securely share their data with third parties but allows the bank, with the customer’s consent, to instantly notify businesses when personal details like an address are updated. 

“It provides a seamless journey for [customers] in their increasingly online lifestyles and it also gives them a secure and safe way of doing that,” she said. “It’s also exciting for businesses as well because they can offer smooth journeys to customers and also reduce the manual data entry rates that impact the conversion of an online journey.”

Last month, the banking group and identity service provider OneID announced a partnership to 

launch a new digital ID service for businesses as part of NatWest’s goal to make its new Customer Attribute Sharing service available as an embedded solution.

According to Melling, the collaboration has garnered great feedback from merchants so far and is already impacting eDocument signing and digital onboarding by cutting down those processes from minutes to mere seconds. 

Embedded Finance, Personalization

Melling expressed optimism about the future of the banking sector, which she said is becoming increasingly open to innovation and partnerships with other organizations.

On the topic of fraud prevention, she said they are “in a great position to share our identity service with other third parties and reduce some of their efforts in that regard,” pointing to government bodies, for example, that need to carry out identity checks and can lean on banks to do so for them. 

She added that API banking technology is also helping to enhance bank-FinTech collaboration, increasing the willingness of both parties to join forces and create strong customer journeys. “It means that two parties can come together far more seamlessly, and hopefully get to create those partnerships in order to support customers.”

Read more: NatWest Pays $174M for UK Savings FinTech Cushon  

In terms of emerging trends in the API economy, she highlighted embedded finance as one that holds great promise for the future and remains a key focus area for NatWest as it strives to offer seamless journeys for customers.

“It’s ensuring that we are in channels that others own so that customers don’t need to keep breaking out of those journeys in order to engage with their bank,” she said, pointing to the checkout experience where customers don’t need to go through a separate banking channel to make a payment, as an example.

Apart from retail, APIs can also significantly impact the mortgage space, she added. “Instead of breaking out of the homebuying journey in order to have a parallel discussion with your bank, why not have the bank as part of that homebuying experience just in route?” Melling argued. 

Finally, as personalization becomes more pervasive and a key competitive advantage for brands, she said banks couldn’t be left behind and must also make it a priority. “Within Bank of API’s it’s personalization of the customer journey and using those data insights that we’ve got to offer great journeys and insights for our customers.”

Further reading: NatWest Acquires Youth-Geared FinTech RoosterMoney

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