Formosa Financial (FMF)

What is Formosa Financial

Corporates and consumers alike are increasingly demanding 24/7 banking services that are accessible through web, mobile, and beyond. In addition to providing user-friendly interfaces, 10 financial institutions are beginning to realize the benefits of a platform banking strategy where individual services are modularized through API integrations, thus allowing third-party developers to bring apps to market. With the introduction of Payments Services Directive 2 (PSD2) in the European Union, the transformation of banks into a secure, permissioned database with standardized API endpoints is actually becoming a regulatory requirement in select jurisdictions.

The growing popularity of API-enabled banking services is particularly well-suited for the emergence of blockchain-based products, as it creates opportunities for seamless integration and interoperability between parallel financial ecosystems. In an effort to leverage the best of both worlds, Formosa Financial plans to develop an API platform with full support for major blockchain protocols alongside traditional corporate banking products. As such, the platform aims to serve as a distribution channel for DApps built on supported protocols that will simultaneously tap into a permissioned banking environment that respects compliance considerations and customer preferences.

The core of the Formosa Financial platform is the API banking layer. This layer provides API endpoints and hooks that interface with traditional bank services and blockchain-based transactions managed by DApps. The platform core stores data on account ownership and identity, compliance rules and permissions, along with segregated data on balance holdings across various ledgers.

For each unique account, various bank services can be enabled or disabled. Basic functions such as checking balances in savings accounts, authorizing credit lines, and sending wire transactions through traditional payment rails will be accessible if the required conditions of the platform rules engine are met.

Of course, each unique bank account will also have associated addresses on supported blockchains such as Bitcoin, Ethereum, and Ripple. Accounts holding balances on these blockchains will be able to utilize DApps built on these protocols for various use cases such as exchanging digital assets, payments, tokenized investments, and more.

As transactions are requested from the banking services layer, parsed and processed at the API banking layer, then ultimately executed on the blockchain layer, all stages of each unique business process will be logged, hashed, and added to a permissioned distributed ledger. Entries to this ledger can only be written by Formosa Financial, but can also be read by authorized parties holding private keys granting granular access levels. This permissioned ledger ensures full transparency, auditability, and compliance such that Formosa Financial is demonstrably acting as a fail-proof technology services layer carrying out customer transactions as instructed.

By unifying balances held on both blockchains and traditional bank accounts, the Formosa Financial platform is positioned to offer unparalleled innovation and convenience to companies in the blockchain industry. Beyond the world of blockchains, API banking also offers fertile ground for innovation by other fintech players offering apps with payments, identity, wealth management, accounting, and more. Bringing in innovations from blockchain projects and fintech will create a rich and diverse ecosystem of service offerings for Formosa Financial customers.