Everything about data, big data and their opportunities

Decentralized identities as enablers in open banking

The digital transformation has profoundly changed the way banking services are used. Banking advice is no longer limited to visiting a branch – customers now expect a seamless, cross-channel experience when accessing banking products. Decentralized identities, also known as Self-Sovereign Identities (SSI), could play a crucial role in this and further change the relationship between banks and their customers. In this article, we will take a closer look at the most important aspects, challenges and opportunities of this development.

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AI cases in banking – AI radar of the Business Engineering Institute St.Gallen

The financial industry is beginning to undergo a profound transformation through the use of AI. In particular, the use of generative AI opens up the possibility of creating new content such as texts, images, videos or music. In autumn 2024, we started building an AI radar that systematically analyzes use cases of banks in German-speaking countries. This blog post offers an overview of use cases and maturity levels in the banking sector and provides exciting insights into the status quo.

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Web3 and the future of the Internet: opportunities and challenges for the financial world (Part II)

Where we looked at blockchain technology as the foundation of Web3 in the first part of this series of articles, in this blog post Roger Heines looks at other important elements of the Web3 concept such as the token economy, DApps, DeFi and SSI as well as the opportunities and challenges of Web3 for the financial services industry.

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Web3 and the future of the Internet: opportunities and challenges for the financial world (Part I)

The internet has developed rapidly since its creation in the 1960s. From the purely static Web 1.0 to the dynamic Web 2.0 to the emerging decentralized Web3. But what exactly does Web3 mean and what role does this next stage in the evolution of the Internet play? For the financial sector, this could have far-reaching implications and at the same time offer immense opportunities. This blog post describes the evolution of the internet and the technology behind Web3.

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Retrospective of the 11th member event of the OpenBankingProject.ch

On November 13, the members of the OpenBankingProject.ch met for the eleventh time to discuss current developments in the field of open banking in Switzerland and to take a look into the future together. The event offered exciting insights into the latest advances and chal-lenges in the sector. In this blog post, the most important highlights and insights of the day are described.

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Five Cloud Myths about Core Banking Systems (Article 3)

In collaboration with Swisscom, a series of articles has been created to answer typical cloud myths in a banking context. We will try to explain these together with three articles and give you simple and common cloud wordings to help you understand the cloud.
In today’s article, we will address the last three myths. If you missed the last article about myths 1 and 2, check here.
Myth 1: The cloud always saves money
Myth 2: The cloud makes it easy for cybercriminals
Myth 3: Once you’ve chosen a cloud provider, there’s no going back
Myth 4: Software in the cloud makes you more innovative
Myth 5: Cloud migration is too complex

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Five Cloud Myths about Core Banking Systems (Article 2)

In collaboration with Swisscom, a series of articles has been created to answer the typical cloud myths in a banking context. We will try to explain these together with three articles and give you simple and common cloud wordings to help you understand the cloud.

In today’s article, we will clarify Myth 1 and Myth 2:

Myth 1: The cloud always saves money

Myth 2: The cloud makes it easy for cybercriminals

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Properties of LLMs, weak points and improvement measures for the domain adaptation of applications

The transfer of the AI paradigm “Foundation Models” in the language domain leads to Large Language Models (LLMs), which can be used to communicate in natural language and can be used in a variety of ways for different tasks due to their “broad training”. However, this requires adaptations of the models for the specific application domains. In this second part of his blog series, Wilhelm Niehoff presents the three method areas of In Context Learning (ICL), prompt engineering and fine-tuning that are used for this purpose. By addressing and using the LLMs, however, design-related weaknesses such as hallucinations, lack of topicality and expertise in detailed topics occur. In addition to the three method areas, there are “up-to-date” approaches such as DSPy and TextGrad, which aim to relieve the user of the task of constructing prompts. Accordingly, the weaknesses are eliminated by adding further components that are coordinated by LLMs.

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Future Business Models for Wealth Management in Germany and Switzerland

In recent months, the BEI has analyzed the future business models of asset management companies in Germany and Switzerland and has published a study. In the process, interviews were conducted with asset managers and, as a result, recommendations for action and business models of the future were defined. The aim of this study was to understand and explain the current state of the art and potential developments.

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Understanding Bitcoin as a productive asset: Part 2 

A Bitcoin-based financial system will necessarily be built in layers. This is because today’s financial system is also multi-layered and recognizes an inherent hierarchy of money-like assets. To properly assess the potential of Bitcoin as a productive asset, it is essential to understand the trade-offs that come with it. In the first part of this two-part blog post, Bitcoin was introduced as a novel monetary asset and the necessity for productive yield generation was discussed so that Bitcoin can take the next step in its evolutionary phase. In the second part, three perspectives on Bitcoin yield products will be evaluated concerning their trustworthiness and the associated risks and trade-offs. Based on these insights, the gold standard of a Bitcoin yield product will be defined and what can be concluded from this for banks and their customers will be explained.

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Workshop series “digital customer proximity”

OpenBankingProject.ch is currently organising a series of workshops on the topic of “digital customer proximity”. Around 40 participants from 30 companies from the financial sector and beyond are examining various target images and use cases on how banks can use concepts such as open banking or embedded finance to position themselves closer to their customers. The aim is to support end customers with digital service access outside of banking and to assist them with banking data, products or services. In this blog post, Stefan Knaus presents the workshop series, the results of the first events to date and the content planned for the future.

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Data strategy in connected business models

From 2019 to 2024, the global volume of digital data generated or replicated annually almost quadrupled – a trend expected to persist (Tenzer, 2024). Technology companies are demonstrating how data is being used to generate revenue that often dwarfs physical assets. Neglecting data can put companies at a significant disad-vantage in the future, leaving them behind data-driven competitors. However, many companies do not utilize the majority of their data and face issues such as data breaches and data silos (DalleMule & Davenport, 2017). The key is to develop and implement data strategies. This blog post presents a categorization for data strategies and their relevance for digital companies and banks in particular.

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What is Bitcoin’s next evolutionary step after the introduction of the Bitcoin ETF – and what do banks need to bear in mind?

Since the launch of Bitcoin spot ETFs in the US in January 2024, Bitcoin has become accessible as an asset to a broad institutional investor base. This marked a significant milestone on its journey as a monetary asset. The next major step in Bitcoin’s development as an investable asset is to unlock yield generation opportunities (similar to dividends on stocks or coupons on bonds). The first part of this two-part blog post introduces Bitcoin as a new type of monetary asset and the need for productive use of Bitcoin and analyses how initial approaches in this area led to the 2022 crypto credit crisis.

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The journey from open banking to embedded finance to contextual banking and the future role of banks

If you look at today’s bank customers, they are always digitally active in their respective living environments. McMakler provides an example of positioning in customers’ living environments. If people search for design ideas for self-built furniture on Pinterest, for example, McMakler displays real estate offers that match their known living preferences. This happens in the context of a cooperation between McMakler and over 400 banks. Under certain conditions, banks can therefore offer their services in the respective living environments of their customers. However, this option is only one alternative as to how banks or individual banking divisions can position themselves strategically. In Stefan Knaus’ blog post from October 24, 2023, we presented four different strategic role profiles in the context of open banking. Now we would like to take a look at current market developments and which use cases have driven banks forward. We will also classify the terms “embedded finance” and “contextual banking”, which are frequently used in this context.

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Overview: Data value creation in companies

For a long time, everyone was talking about data. “The world’s most valuable resource is no longer oil, but data” (The Economist, 2017) was the ubiquitous mantra. However, advances in the field of artificial intelligence (AI) are currently dominating the media, driven in particular by generative AI such as ChatGPT, DALL-E and the like, which can create new content such as text, images or speech. These generated data instances are in turn created with the help of technology on the basis of enormous data sets (Touati, 2024). Accordingly, it is becoming increasingly relevant for companies today and in the future to deal with the topic of “data” as the basis for value-adding activities. The Competence Center (CC) Ecosystems of the Business Engineering Institute St.Gallen develops solutions for relevant practical problems and addresses, among other things, the use of data as a key role for business success in dynamic environments. This blog post provides an introduction to the research in the field of data value creation for companies at the CC ecosystems.

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Study: Digitalization in Procurement Management

The digital revolution has reached the business world, and procurement management is no exception. The latest study by the Business Engineering Institute St. Gallen, “Digitalization in Procurement Management”, sheds light on how profoundly digitalization is changing this area. This blog post summarizes the key findings of the study to shed light on the opportunities and challenges that digital transformation brings for companies.

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Are our jobs at risk?

The first part of this blog series described different ways in which AI can affect individual professions. To analyze the impact of AI on the Swiss economic sector, a comprehensive qualitative and quantitative study on the exposure of individual professions to AI was conducted using a task-based view. The second part of this article series summarizes the results of this study and presents implications for policy and management.

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Research Area Business Ecosystems

As part of his research in the field of business ecosystems, Dennis Vetterling repeat-edly comes into contact with organizations that use the concept of ecosystems for their own purposes. In his work, two perspectives on ecosystems have emerged: a “company-centric” and a “customer-centric” perspective. In this article, Dennis Vetter-ling gives an insight into these two perspectives and an indication of how organiza-tions can use a combination of both in the context of a strategic analysis.

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Strategic Role Profiles in the Context of Open Banking for Swiss Banks

In the context of Open Banking, four different role profiles can be distinguished that banks can assume: Individualist, Producer, Distributor and Platform. The role profiles are differentiated with regard to the distribution and creation of services and allow banks to put together a tailored, new business model in the individual banking areas. In the second part of this three-part blog post series, the individual role profiles will be described in detail and their impact on a bank’s business model will be illustrated.

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Study results analyzing the needs of Swiss individuals for trusted data spaces 

To harness the potential of data to better target societal and economic needs and foster innovation, the Swiss federal administration is promoting the development and operation of trusted data spaces for its citizens. In order to identify the needs of the individuals of Switzerland in terms of data spaces and thus to involve the population in the process of developing trusted data spaces, the Business Engineering Institute St. Gallen has developed a study in collaboration with the University of Lausanne. The following is a brief summary of the results of the study.

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Implications of Open Banking for the Business Model of Banks 

In order to implement Open Banking, the European Union has been pursuing a regulatory-driven approach with PSD2 since 2018. In contrast, Switzerland is currently one of the few countries like the United States, Argentina, South Africa, and China to pursue a market-driven approach. However, last December, the Swiss Federal Council addressed Swiss financial institutions with a clear message and wants to accelerate developments around Open Banking. The first part of this three-part blog post series presents the impact of Open Banking on the business model of Swiss universal banks.

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This was the Open Banking Summit 2023

After the successful Summit 2022, the doors opened again on August 24th at Google in Zurich for this year’s Open Banking Summit 2023. With over 100 participants and top-class speakers, the OpenBankingProject once again proved to be one of the enterprise networks in the context of Open Banking. This blog post summarizes the content of the Open Banking Summit 2023.

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Research Area Distributed Ledger Technology

The Competence Center Ecosystems of the Business Engineering Institute St. Gallen develops solutions for relevant problems from practice. In the context of this blog post, the overall research goal of the re-search area Distributed Ledger Technology (DLT) is presented. This research goal is to develop a frame-work that demonstrates and supports the methodological approach of DLT implementations to enable companies to adequately address relevant requirements of the implementation process of a DLT.

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