With the passage of the 2013-amended version of the Payment Service Providers Directive (PSD2), banks in Europe needed to take a large step towards modernization. More specifically, these financial institutions were now required to open up access—in a secure fashion—to customer accounts and information, supporting new online payment and account management services provided by outside, third-party service providers.
Unfortunately, many banks in Bulgaria relied on older IT platforms to manage their operations—platforms that lacked the effective integration and security measures necessary to support a smooth transition.
“When we spoke with local banks and financial institutions, we realized that most of them were so far behind in their architecture strategies that we were going to have to start from the beginning,” recalls Goran Angelov, Chief Executive Officer (CEO) and Founder of IBM Business Partner IBS Bulgaria. “There were a lot of integration problems in place that not only made it difficult to comply with the regulation but that were actually slowing down their internal processes and overall digital transformation.”
90%
In Bulgaria, IBM integration technology is present in roughly 90% of open banking platforms
Reduced integration time
Accelerates integration projects, cutting timelines from roughly 2 months to ~ 1 week
“But this was not just a technical problem or regulatory problem,” continues Angelov. “It was a business problem. If all your competitors can now buy the same digital platform or core banking solution with the same capabilities that you use, the only differentiator you have is how you are able to seamlessly interconnect these processes to what you do. The speed and consistency of service that you can offer.”
Wanting to help its customers more seamlessly navigate this time of transition, IBS Bulgaria began developing a new open banking platform.
In short order, IBS Bulgaria launched its new IBS Open Banking solution, powered by IBM API Connect® and IBM Cloud Pak® for Integration technology. The two IBM offerings oversee integration with the outsider providers and customer banking systems, respectively. Meanwhile the open banking platform also delivers consent management tools for API testing and mobile banking.
“We’re a Deep Blue company,” notes Svilen Stanchev, Business Development Manager for IBS Bulgaria. “We are very familiar with all of the IBM products and programs, and IBM offers a better platform for integration. It’s the out-of-the-box performance. It’s the ease of use, the total cost of ownership, the pre-built connectors already inside IBM’s solutions.”
“We’ve created more than just an open banking solution,” adds Angelov. “It’s a platform for integration. It can not only integrate users to the outside world, but it can also integrate all of a bank’s internal processes as well. And we don’t just sell a tool, but we teach our customers how to actually establish clear practices around integration.”
He continues: “So now they have monitoring. They have visibility into the entire process. They can enact new services or support outside providers without having to completely change their back-end systems.”
After the initial launch, IBS Bulgaria continues to look for options to enhance its platform, and recently it began supplementing the solution with IBM® Safer Payments technology. “We use it for transaction monitoring and counter-fraud,” notes Angelov. “And when coupled with the entire solution, it can track everything—all the channel calls, banking systems, additions services for master data—everything.”
And to help simplify the deployment of these IBM technologies within its open banking platform, IBS Bulgaria signed an IBM Embedded Solution Agreement (ESA). “Most of the big banks that we work with already have established relationships with IBM,” explains Angelov. “But for everyone else, the ESA is very useful. We can avoid competitive wars by embedding the software. It’s easier to adopt and just helps our projects go smoothly.”
With PSD2 compliance now fully required, IBS Bulgaria witnessed broad adoption of its new platform. “Not only can users meet their PSD2 obligations, but they can do their integration really fast,” notes Stanchev. “What would have taken around two months with the old way, they can do now in one week. That shortens the time to market for new services a lot. It makes us faster too—when we have follow-up projects, we can often have everything ready to launch before the contract is signed.”
He continues: “I’ve also observed that many of our customers have seen a huge cost reduction. They’ve gained the skills and tools to handle integrations on their own. And if there is an issue, they have the visibility to see what is happening. They know which system is undermining the integration and can resolve it quickly.”
“I had a conversation with a CFO recently,” recalls Angelov, “for one of our customers who is in the process of modernizing their digital platform. And he said that decoupling online banking and internet banking from the company’s old back-end solutions will help his organization be much faster. For example, they built a new wallet to integrate with Apple and Google payment services in just a couple of weeks.”
Based on these simplified, accelerated integration capabilities, both IBS Bulgaria and its customers are pleased with the choice to rely on IBM technology and the streamlined delivery made possible by the ESA.
“Currently, around 90% of open banking in Bulgaria is actually developed on the IBM integration stack and relies on IBM technology,” adds Angelov. “IBM API Connect and the IBM Cloud Paks are rock-solid integration technology. You have no risk establishing your services on the IBM integration bus. And you can trust the IBM direction. Everyone now is speaking about microservices and containers, and who has the vision about building all these components into a common containerized layer? From our perspective, it’s only IBM. So it was a no-brainer why we decided to standardize everything and build on top of IBM.”
IBM Business Partner IBS Bulgaria (link resides outside of ibm.com) provides IT support services, specializing in API management, consulting, systems integration and software development. The business is headquartered in Sofia, Bulgaria and was founded in 2003.
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