Christoph Berentzen
Commerzbank is on a mission to become an open banking champion. Since the formation of its application programming interface (API) programme in 2017, the German lender has deployed and prioritised open banking principles in pursuit of this ambition.
On a technical level, API banking is being used to develop integrated services across organisational boundaries. This involves collaborating with other operators in the open banking ecosystem in order to co-innovate solutions that enhance value for the bank’s customers. Beyond the technology, however, Commerzbank is also fostering a culture of “trust and encouraged experimentation”, internally and with its chosen partners, as it looks to the future.
“It’s important that banks start acknowledging that their business is changing,” says Christoph Berentzen, head of API banking at Commerzbank. “They have to move from being product companies to platform companies. When we have a deeper look into what that really means, it’s to say that no one can do it alone. If you want to be part of the ecosystem game, you have to search for partners. It’s about leveraging the different strengths of all the operators in the wider open banking ecosystem.”
Indeed, the diversity of Europe’s open banking ecosystem means that established banks are working side by side with early stage fintechs, software companies and other legacy financial institutions, as well as their customers. For Commerzbank, generating the right culture, in which these participants can all interact on an equal footing, is paramount. “Having the right culture is so important for innovation. And when you look at the development of an open banking ecosystem, it is even more important,” says Mr Berentzen.
Beyond consumers
Commerzbank’s strengths in corporate banking — as Germany’s market leader in this segment — means that its open banking journey is prioritising the needs of its corporate and small and medium-sized enterprise (SME) clients.
“What we see is that employees in the corporate sector expect the same banking convenience they experience in their private lives applied to the business domain. As a result, the big corporates want to be part of the open banking ecosystem,” says Mr Berentzen.
“This is where we are now required to become a platform orchestrator or a platform owner, where we can offer our corporates the opportunity to collaborate in order to create some added value for their customers, or for shared customers. This is what I see as a change in the industry,” says Mr Berentzen.
It’s important that banks start acknowledging that their business is changing
Commerzbank’s corporate payments API, for example, offers customers seamless access to the bank’s payment solutions. As the lender forges ahead with its plans, it is also advancing the development of a corporate banking ecosystem fit for Europe’s new age of open banking. “[When it comes to corporates], I haven’t seen any ecosystem in Europe where a bank is currently more than a commodity provider. But I think this is just a question of time because when I look to Latin America or Asia, I see that this is already happening. Ecosystems are being created for SMEs, or even for corporates, where they have integrated about 60 fintechs,” says Mr Berentzen.
New revenue streams
Beyond the development of healthy ecosystems, most lenders, including Commerzbank, are looking to monetise their open banking investments. The opportunities here appear healthy, with lenders able to secure fees, commission and sales revenue, among other possibilities, through their partnerships and collaborations. “I think an important change that we see in open banking is that banks want to see results from what they are doing in terms of profit,” says Mr Berentzen.
As Commerzbank looks to the future, it is also hoping to address some of the challenges that are hindering the development of open banking in Europe. Among other things, this includes a lack of standardised technical interfaces, and even data sets, between institutions. “We definitely aim to become a leader in open banking. Therefore, we are promoting open banking in several ways, including partnering with corporates, technology and fintech companies, as well as driving API standardisation in tandem with other players across the industry,” says Mr Berentzen.
