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BNP Paribas prototyping custody APIs

Buy-side customers will be able to access NAV and other information by tapping directly into the systems of BNP Paribas Securities Services.



Philippe Ruault, BNP Paribas

BNP Paribas Securities Services will launch APIs allowing its buy-side clients to download information about net asset values, fund accounting and other operational details.

The APIs are in prototype and the first ones should be introduced live by the end of the first quarter this year, says Philippe Ruault, Paris-based head of digital transformation.

The bank calls the platform NeoLink and it will begin with data for transfer agency (registrar functions), fund net asset values (NAVs) and security valuations.

He oversees an effort to use new technologies – artificial intelligence, blockchain, data analytics – to reshape the experience custody banking clients have.

The new competitive arena
Other custodians are also using APIs and Raualt says this is going to be an area of fierce competition. Large asset owners and fund managers use multiple custodians, and BNP Paribas hopes to provide them with consolidated information.

“Asset managers are asking us to aggregate transfer-agency data and develop analytics on it,” he told DigFin. “Any digital transformation has to start with the customer.”

Open APIs have already become a reality at the consumer banking level, especially now that the European Union’s Revised Payment Service Directive, a.k.a. PSD2, requires banks to publish account statements that way.

For now the bank’s custody APIs are being made available to customers over desktop computers, but Ruault’s team is looking to enable these through messaging apps or via voice-to-text technology. “We are trying to anticipate what users will want by 2025, which will include chat and mobility.”

Slow but secure
The bank is working to ensure uploading data for purposes of fund accounting still need internal approvals from compliance and risk managers. There also continue security efforts to “cyber-proof” the data and keep it anonymous, so that only customers see their own data.

Although the prototype is nearing launch, Ruault says it will take about three years for APIs to extend throughout the custody business. “Everything needs to be re-documented, and put under a governance framework,” he said.

The bank is working on four other digital products that he expects to be launched by the end of 2018, in finance, in risk management, in asset servicing, and in the investment office (pre-trade functions such as aggregating data analytics).

But these things take time. For example, the finance project is designed to let a fund manager capture data about sales and costs, giving the customer a more complete look at their business. While the concept is straightforward, ensuring the data is correct and secure, and available from the bank’s data lake, is a lot of work.

“Progressively we are breaking down our silos, but we need to spend the time to ensure it is built in a secured environment,” Ruault said.

Future deliverables
Most of the work is being developed internally, and run through BNP Paribas’s proprietary cloud network, although the bank also draws on Fortia Financial Solutions, a machine-learning fintech in which the bank took a minority stake in early 2017.

BNP Paribas is also working with Tata Consulting Services to develop a solution for reporting corporate actions over a blockchain, which is slated for 2019. Internally Ruault’s team is working with neutral networks to develop translation capabilities, to help it roll out unified services across different markets, and to extract information from ISDA contracts and other documents.

It also has launched a blockchain project with its client AXA Investment Managers for customer onboarding.

All of these more advanced projects fall back on better use of internal data to improve the customer experience, Ruault says.

Julien Kasparian, BNP Paribas Securities Services’s Hong Kong CEO, says the technology program is designed to improve how clients buy and use BNP Paribas’s services. “It’s about consistency and harmonization,” he said. “The data lake needs feeding in order to become the golden source, and that takes time.”

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