A Recap of #TFITS, Part 2: Getting Ready for the API Evolution in Japan
Tokyo Financial Information & Technology Summit (TFITS) is the only event in Japan dedicated to IT, data, and operations executives from financial institutions.
TFITS is a one-day conference hosted by WatersTechnology and sponsored by 6 solution providers across APAC. This year’s Summit was held on July 5. The 2018 agenda packed with practical insights on:
- Data governance framework that would create business value and achieve cost efficiency.
Data strategies for global regulations such as MiFID II and FRTB.
Moving from a closed, in-house approach to an open, innovative post-trade operating model.
The role of Artificial Intelligence in data extraction and providing predictive insights on trading.
Cutting-edge technology disruptors available to automate processes and add value to customers.
- How the introduction of API would revolutionize the risk, trading and investment functions.
I had the privilege of moderating a main stage strategic panel discussion titled “Getting ready for the API evolution.”
My panelists were:
- Eiichi Kashiwagi, President & CEO, JIBUN BANK CORPORATION
- Norifumi Yoshimoto, General Manager, SBI SUMISHIN NET BANK LTD
- Suguru Yamasaki, Senior Digital Strategist, SUMITOMO MITSUI FINANCIAL GROUP
Getting ready for the API evolution
Panel Discussion Agenda:
- The progress of API utilization and expectations for new services.
- Advantages of API.
- The role of IT department.
- How API will innovate core businesses.
In May 2017, the Japanese financial industry shifted to a new framework. The Amended Banking Act introduced a registration system for Electronic Settlement Agency Service Providers, so-called third-party providers (TPPs), and announced policies of collaboration between banks and TPPs. Measures concerning the promotion of open innovation at banks eventually emerged as new regulations. This turned out to be a major shift in Japan’s financial regulations.
When financial institutions disclose APIs to TPPs, the biggest system risks concern issues such as data leakage/tampering, illegal transactions, and more. API is a new communication path for information systems, but it could be misused. There is also a possibility that data included in the user’s account information and settlement instructions will be exposed to the risk of leakage/tampering via TPPs. In response to this risk, various discussions emerged in Japan so far. The outcome of the discussions was a shift from the legacy screen scraping method to open application programming interfaces (APIs) and token authentication. The screen scraping method will no longer be accepted in the Japanese market in the future.