OPEN BANKING EXPO IDEAS, CONNECTIONS AND DEALS IN OPEN BANKING
Issue 6_Mar/Apr 2020 OPENBANKINGEXPO.COM
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INNOVATION PATH Will banks partner, acquire or innovate within?
GOODBYE FRAUDSTERS Will new SCA rules help banish them? time for change
FUTURE FASTRACK How can we accelerate Open Finance adoption?
COVID-19 CRISIS The industry reacts and collaborates to fight back
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Editorial
PUBLISHER’S WELCOME
Adam Cox Publisher & Co-founder adam.cox@openbankingexpo.com
The speed and agility of new services forming part of an industry-wide Covid-19 relief network has been nothing short of phenomenal.
As we go to press the UK enters its fourth week of lockdown to control the spread of Covid-19. First off, may I take this opportunity to send my best wishes to everyone in our community as we continue to find a new normal indefinitely, as we fight this virus together. When we sat down to discuss our content plan for this issue, to a certain extent it paled into insignificance due to the global health crisis we are all battling. However, what became clear when speaking to the industry is that whilst home working is now part of that new norm, the opportunity to consume market insight, developments and news continues to score high on the list of priorities for many. When the cold reality of the impact caused by Covid-19 started o materialise, a rallying call was not needed. Instinctively and unsurprisingly a variety of industry players put their technical expertise to good use by trying to protect the most vulnerable in society without a second thought. The speed and agility of new services forming part of an industry-wide Covid-19 relief network has been nothing short of phenomenal. You can see on p10 just one effort brought to market by Nottingham (UK) based, Tully. This is just one initiative in the market, and it is heart-warming to see many more created as the days progress.
This issue has a strong focus on the possibilities and next steps for Open Finance (see feature on p26), which is a significant topic right now. One could ask the question what positive impact living in an Open Data world really could have had on the immediate and ongoing global response to Covid-19. As well as the feature, we are also joined by Carlos Figueredo, the chief executive officer at Open Vector who also touches on this line of thought on p36. Outside mission critical of overcoming Covid-19, the last few weeks has seen the Government announce a fintech review, a flurry of activity with multiple bank and fintech tie ups, including the announcement that Open Banking platform Tink has acquired fintech Eurobits for a cool 15 million Euros (p7), and last week an update from the Competition and Markets Authority (p6) on the revised Open Banking roadmap. Whilst this is anything but business as usual for so many at the moment, there is a clear will from all corners of the market to not only come through this challenging period, but to do so in a way that ensures we reach the surface once again ready to challenge, innovate and deliver real value to consumers and business alike. Enjoy the issue and stay safe.
03
Editorial
CONTENTS I s s u e 6 _ Ma r/A p r 2 0 2 0
Regulars
Cover Story
06 News
16 SCA: THE NEW SAVIOUR
Santander snaps up Spanish fintech Mercury TFS; CMA issues response to Open Banking roadmap revision; Barclays unveils Open Banking enhancements
Insights
Will Strong Customer Authentication rules help banish fraudsters and build consumer trust? Joe McGrath investigates
Features
22 Rishi Chauhun,
Haydon and Company Limited
30 Marcus Martinez, CGI 31 Ruta Merkeviciute,
20 Live Stream Event
Bank of Lithuania
24 Future Focus
Lana Abdullayeva: Lloyds’ director navigates the digital future
29 View from the Top
David Beardmore: Latest update from the OBIE
Carlos Figueredo: Open Vector’s CEO reflects how Open Finance could have helped fight Covid-19
20
36 Global Spotlight
In December 2019 the UK’s
financial watchdog asked the industry for feedback on its vision for Open Finance which it claimed could “transform the way consumers and businesses use financial services.” How can we accelerate it?
Simon Cureton: Open Banking can assist SMEs during Covid-19
38 Open Banking & PSD2 Hub
In an Open Banking Expo live stream last month, senior representatives from the UK banking sector discussed how the industry plans to innovate in 2020 and beyond; by acquisition, partnering or innovating within?
26 Open Finance Adoption
37 SME Focus
Your directory of leading suppliers in the market
47 The Last Word
my Kroviak asks if the market A is set to outpace regulators?
04 O P E N B A N K I N G E X P O . C O M
26 Mar/Apr 2020
Editorial
The Big Interview
12 Steve Tigar
Chief Executive Officer, Money Dashboard
Launched in 2010 to help people take control of their financial life, the firm is now looking towards an Open Finance future.
We are now equipped and ready to help people from every walk of life master their money.
32 Centralised Thinking As interest and excitement
builds in central banks’ involvement in the development of digital currencies, Jenny Turton asks what fundamental milestones need to be achieved.
32
CO NTR I B U T O R S
Edit o ria l
Pr od u c t ion & M a r k et in g
Commercial & Events
editorial@openbankingexpo.com
Christian Gilliham Art Director christian@cgcreate.co.uk
Kelly Stanley Event Director kelly.stanley@openbankingexpo.com +44 207 993 5159
Lauren Linfield Head of Marketing lauren.linfield@openbankingexpo.com
Adam Cox Director adam.cox@openbankingexpo.com +44 207 993 5159
Joe McGrath Senior Reporter Jennifer Turton Reporter Ellie Duncan Reporter
Sophie Carus Content Director sophie.carus@openbankingexpo.com
@OpenBankingExpo in Search for Open Banking Expo BOROUGH BENCH MEDIA The Open Banking Expo is organised by Borough Bench Media, registered in England and Wales. Registered Office: Kemp House, 152-160 City Road London, EC1V 2NX T: +44 207 993 5159 hello@openbankingexpo.com
OPEN BANKING EXPO IDEAS, CONNECTIONS AND DEALS IN OPEN BANKING
Issue 6_Mar/Apr 2020 OPENBANKINGEXPO.COM
T H E
SCA
N E W
S AV I O U R ?
PAGE
16
INNOVATION PATH Will banks partner, acquire or innovate within?
GOODBYE FRAUSTERS Will new SCA rules help banish them? time for change
FUTURE FASTRACK How can we accelerate Open Finance adoption?
COVID-19 CRISIS The industry reacts and collaborates to fight back
05
News
T H E L AT E S T NEWS FROM THE OPEN BANKING ECO-SYSTEM
Santander snaps up Spanish fintech Mercury TFS
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anco Santander has paid 30m Euros to acquire a major stake in Spanish fintech Mercury Trade Finance Solutions as it continues to boost its digital banking services for SMEs and corporates. The 50.1 per cent stake in Spanishbased Mercury TFS, which develops trade finance software to automate transactions for business customers, builds on Santander’s digital strategy to accelerate growth by buying up corporate stakes. Mercury’s software will enable Santander customers to manage their entire trade finance activity online or via mobile phone with the aim of reducing response times and improving service quality. Mercury currently employs 130 people in Spain, Mexico, Chile and Colombia. One third of Santander’s investment will be earmarked to subscribe for new shares, which will inject funds into the company to enable new services and boost growth in customer numbers and markets. Mercury TFS’s chief executive officer and head of technology will continue
to head up the company. While Santander has used Mercury TFS’s services in Spain, Mexico, Chile and Germany for years, the bank’s UK and Portugal businesses will use the platform for the first time at year-end through Global Trade Services (GTS), Santander’s global trade platform. GTS offers international payments, currency exchange, trade finance and multi-country accounts to SMEs and companies conducting international business. “The investment accelerates our plans to build a service platform for SMEs and international companies to better serve our customers worldwide,” Javier San Félix, head of Santander’s Global Payments Services, said. “We are also helping to globalise
Mercury TFS, a software company with huge potential and a team with enormous talent, by reinforcing their technical and commercial teams and complementing their already broad product range.” The news is part of a wider acquisitive trend. In November, Santander also bought a controlling 50.1 per cent stake in Ebury – one of Europe’s fastest growing fintechs which provides corporate banking and international payments services for SMEs. At the end of 2019, Banco Santander had 1.05 trillion Euros in total funds, 145 million customers, of which 37 million are digital, and 200,000 employees. It also serves more than four million SME clients globally.
Mercury’s software will enable Santander customers to manage their entire trade finance activity online or via mobile phone with the aim of reducing response times and improving service quality. Mercury currently employs 130 people in Spain, Mexico, Chile and Colombia.
CMA issues response to Open Banking roadmap revision The CMA issued a response to the proposed revised Roadmap for Open Banking. In this response, broadly all proposals by the Open Banking Implementation Entity (OBIE) were agreed to, with precautionary measures raised in regards to timescales for delivery with it being possible the CMA9 may need to divert resources to deal with crisis-related activity during the Covid-19 outbreak. Trustee of the OBIE, Imran Gulamhuseinwala said: “Today the CMA published an updated Roadmap that will now enable us to complete 06 O P E N B A N K I N G E X P O . C O M
the implementation of Open Banking. I am pleased the CMA has substantially approved all the proposals that are intended to improve performance, fill in the gaps in payment functionality and enable greater user adoption. The CMA requires some amendments and further detail on timing to account for the impact of Covid-19. The CMA shares my view that, whilst we have made good progress, having passed the one million user mark in January, more needs to be done to ensure that we can look back on a successful implementation of Open
Banking in the UK and ensure more consumers and businesses are able to use Open Banking to manage their finances.”
Aug/Sept 2019
News
Open Banking platform Tink acquires Eurobits
SOUND BITE
Visa invests in Railsbank London-based Open Banking and regtech platform Railsbank has topped up its Series A funding round with investments from Visa and Japanese VC Global Brain.
Tink has continued in its expansion across Europe with the acquisition of Eurobits Technologies, a leading provider of account aggregation services that powers more than 50 banks and fintechs including BBVA, Santander, Sabadell and Fintonic. The acquisition will strengthen Tink’s bank connectivity coverage and its market position in Southern Europe in a deal reported to be worth 15.5 million euros. It builds on the 90 million euros investment secured in January 2020 and will see Tink increase its bank and financial institution connectivity in 17 markets, predominantly in Europe and in Latin America. Eurobits serves some of the largest fintechs and financial institutions across Europe, providing connectivity to bank account information for banks, fintechs and payment providers. The account aggregation services provider, founded in 2004 and headquartered in Madrid, handles more than 50 million account
aggregation requests every month in 11 markets. In addition to its European focus, Eurobits also serves customers in Mexico, Chile, Colombia, Argentina and Peru. “Joining forces with Tink to help expand their coverage across Europe and Latin America is a unique opportunity, not only for both of our businesses, but for the broader industry as a whole,” said Eurobits chief executive officer, Arturo Gonzalez MacDowell. Tink’s co-founder and chief executive, Daniel Kjellén continued: “This acquisition is part of our ongoing investment into our pan-European Open Banking platform that through this move will be live in 17 markets.” Ana Climente Alarcón, the head of Open Banking for BBVA Spain, added: “Tink and Eurobits joining forces is a significant moment in the industry, with two leaders in the Open Banking space coming together with a common vision of making Open Banking more accessible for everyone.”
Revolut partners with TrueLayer for UK service Digital bank Revolut has announced the launch of a new Open Banking feature to its UK customers, allowing them to see all of their bank accounts in one place. Revolut, which has amassed 10 million retail and business customers since launching in 2015, has partnered with financial API provider TrueLayer to launch an Open Banking feature that enables customers to connect all their external bank accounts to the Revolut app. Real-time data functionality allows customers to manage all transactions and balances from one place, as well as track
spending and set budgeting controls. The service is available to both retail and business customers. Calling the current banking process offered by traditional legacy banks as a “fragmented, broken process” that leads to unfair fees, expensive overdrafts, and mismatched financial products, Truelayer said its partnership with Revolut signals a new era in banking.“We’re thrilled to be working with challenger banks like Revolut who are changing the status quo and using our technology to help deliver more value and better experiences to
QUOTE OF THE MONTH
A failure to integrate Strong Customer Authentication demonstrates a disregard for consumer protection – it should have been prioritised long ago. James Stickland Chief Executive Officer, Veridium
Railsbank picked up $10 million in September 2019 for its Series A. The size of the new investments has not been disclosed but is in the millions of dollars, according to various sources. Visa and Railsbank have also agreed a five-year partnership to help push a Banking as a Service offering in Singapore, the Philippines, Vietnam and Thailand. The announcement also covered Railsbank becoming a Visa principal issuing member. Verdon said “I personally moved to live in Singapore to open our regional head office here so we can offer our unique platform to a far wider audience and be an enabler of financial inclusion, which is one of the core principles co-founder Clive Mitchell and I set up Railsbank to achieve. Our partnership with Visa signals our intent to be the most innovative banking platform business in Asia-Pacific.”
customers,” Francesco Simoneschi, co-founder and CEO of TrueLayer, said. “The entire process to get up and running and start experimenting with TrueLayer was quick and painless,” Joshua Fernandes, product owner for Open Banking at Revolut, explained. “We found their API was robust and developer-friendly, and we’re already realising the benefits.” Revolut’s Open Banking capability comes a month after its ambitious entry into the UK savings market which saw the company launch an easy-access savings account at a competitive interest rate of 1.35 per cent.
07
News
UK government announces fintech review
The UK government is to conduct an independent review of the UK fintech sector, with a view to enhancing investment and support. The review is to be led by Bank of England non-executive director Ron Kalifa. In a recent Budget announcement, Chancellor of the Exchequer, Rishi Sunak, said the review would foster growth and competitiveness in the industry. As part of a package of measures, the government has committed to extending funding for the FinTech Delivery Panel. In a media statement responding to the announcement, Charlotte Crosswell, CEO
of Innovate Finance, said she welcomed the decision to conduct the review. “We are confident that this timely and important review will underpin the future growth and prosperity of the sector across the whole of the UK,” she explained. “The last decade has seen fintech emerge as one of the most important parts of our economy.” “It is attracting record levels of investment and as a result helping to bring new services, increased choice and value in the market and more jobs to the UK.” Ms Crosswell added that the UK was not at a ‘crucial moment’ in the sector’s development. “UK companies are now entering a phase of maturity that requires action to ensure that entrepreneurs can not only establish and scale their business in their home market, but export their products and services internationally. “By better understanding the needs, requirements and key focus areas for the sector, we will put ourselves in a strong position to boost the fintech industry and support the economy as a whole.” In the post Budget documents, released after Mr Sunak’s speech, the government outlined plans for a consultation on the appeal of a UK central bank digital currency. In addition, the government will be consulting on measures to incorporate crypto assets into existing financial promotions regulations, later in 2020.
Barclays unveils Open Banking enhancements UK retail bank Barclays is enhancing its Open Banking service, to allow customers to make payments from bank accounts held elsewhere, through the Barclays app. The service will initially assist customers who have a current account with NatWest, Nationwide or Bank of Scotland as well as holding a Barclays account. Other banks will join the line up in due course, the bank said in a media announcement, with Santander, Lloyds, Halifax and Royal Bank of Scotland earmarked for wave two. “Day-to-day life is busy enough without juggling multiple
Other banks will join the line up in due course, the bank said in a media announcement, with Santander, Lloyds, Halifax and Royal Bank of Scotland earmarked for wave two. 08 O P E N B A N K I N G E X P O . C O M
banking apps to stay on top of your finances,” Caroline Ambrose, Barclays’ director of Open Banking said. “That’s why we’re working to make our customers’ lives easier by putting everything in one place and adding features that help them manage their money in a secure and straightforward way.” Ms Ambrose said that additional payment functionality would be added in the next stage in Barclays’ programme to give customers “even more control” of their cash by offering additional ways to do every day banking tasks. The announcement builds on Barclays’ initial Open Banking offering which allowed customers to view their available cash in current and savings accounts and credit cards from other UK banks, through the app. Further enhancements to the functions available inside the app are going to be announced in the coming weeks, according to the Barclays statement, including the ability to save payment contacts through the app, without needing to enter details each time.
METRICS
Open Banking Implementation Entity on how account providers’ (ASPSPs)* Open Banking APIs are performing with key performance metrics. *Account providers (ASPSPs) are currently made up of the following banks, building societies and sub brands: Allied Irish Bank, Barclays, Bank of Ireland, Bank of Scotland, Danske, First Direct, First Trust Bank, Halifax, HSBC, Lloyds Bank, Marks & Spencer, Nationwide, NatWest, Santander, The Royal Bank of Scotland and Ulster Bank.
98.91% Average API availability
348m
Successful API calls (actual)
728
MILLISECONDS
Average API response time
2.07% Failed API calls
97.93% Successful API calls
Mar/Apr 2020
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News
Tully launch Covid-19 Relief & Wellbeing Network
In a bid to help people financially impacted by the Covid-19 health crisis, Tully has announced the launch of its Covid-19 Relief and Wellbeing Network. The Nottingham-based fintech is providing a ‘free to consumer’ digital outsourcing service that registers consumer applications, validates eligibility for payment relief and shares that information with relevant partners in the network. The service means that consumers won’t have to spend hours in call centre queues and instead will be able to register for Covid-19 relief quickly and easily through a single online process.
If you are a bank, credit card company, mortgage lender, energy supplier, water company, local council or Government department – our rallying call is to join our network and help your customers get the relief they need now and throughout the crisis. It is more important than ever to collaborate and give people the support to mitigate the financial impact of Coronavirus. Olly Betts, Co-founder and Chief Product Officer, OpenWrks Group
10 O P E N B A N K I N G E X P O . C O M
It will also reduce the strain on contact centres, enabling creditors to focus on supporting their most vulnerable customers. Via Open Banking, Tully has access to over fifty of the UK’s leading banks and credit card providers meaning over 95% of the UK can access the service online. The Tully platform builds on Open Banking data by engaging the consumer through conversation AI to understand their very latest financial situation. Tully’s partners have started directing customers and employees to the Tully Covid-19 website with expectations that over two million people will be reached within the first eight weeks of the service launching. To ensure the network can accommodate the growing numbers, Tully has support from its key technology partners Microsoft, Mailchimp and Intercom to scale and reach millions of people. Olly Betts, co-founder and chief product officer at OpenWrks Group the team behind Tully – said, “If you are a bank, credit card company, mortgage lender, energy supplier, water company, local council or Government department – our rallying call is to join our network and help your customers get the relief they need now and throughout the crisis. It is more important than ever to collaborate and give people the support to mitigate the financial impact of Coronavirus.”
Mettle announces partnership with FreeAgent for its business customers
Business banking challenger, Mettle has announced it has partnered with FreeAgent. This will see firms gain free access to FreeAgent’s accounting software. The partnership will see SMEs save up to £150, or the minimum cost of an annual subscription to FreeAgent. Entering into this partnership SMEs will be able to see accounting results in real-time which will assist in reducing the risk of admin errors and duplications for example. Ken Johnstone, chief product officer at Mettle, added: “We’re thrilled to be launching an innovative partnership with FreeAgent that will not only allow businesses to have greater insight and control over how they run their business but will do so completely free of charge.” Ed Molyneux, chief executive officer of FreeAgent, said: “We’re really excited to be working with Mettle and providing small business customers with the most intuitive way of staying on top of their finances.” Mettle’s parent, NatWest, is also hoping to gain access to the £330bn promised by the Government in order to help the soar in SME calls to assist financially throughout the current global health pandemic. Mar/Apr 2020
News
Credit Hero teams up with Salt Edge
Credit Hero, an online lender from Hong Kong, has teamed up with Salt Edge to access borrowers’ bank data at digital speed and eliminate the traditional paper chase. Credit Hero uses artificial intelligence and data science to provide lending solutions. The company employs optical character and facial recognition for risk assessment and machine learning for automated underwriting. AI technologies run bank data aggregated from nine major Hong Kong banks to reduce the lending process time from days to six minutes. Equipped with Salt Edge tools, Credit Hero has improved its bad debt rate by enhancing credit risk analysis. “The collaboration with Salt Edge granted us access to real-time financial data to automatically verify the applicant’s identity, account number, income sources, and balance,” Ronald Lam, founder & chief executive officer of Credit Hero said. Vladimir Pintea, the head of Open Banking gateway at Salt Edge, said: “Credit Hero applicants can now avoid the headache of bringing in paper bank statements. The required data is aggregated from banks and digitally transferred directly into the lending platform. Receiving all the transactions categorised, Credit Hero can instantly analyse borrowers’ financial spending habits and provide fairest rates of interest.”
Credit Kudos and Police Credit Union win Nesta Challenges’ Affordable Credit Challenge
FAST STATS
€15.5m
Amount Tink paid for Eurobits Source: Tink
$13m
Raised in Yapily’s latest funding round Source: Yapily
A reward loan solution developed by Credit Kudos and Police Credit Union was announced in the budget as winners of Nesta Challenges’ Affordable Credit Challenge, using Open Banking to help even more borrowers access responsible credit. At present, many serving in the military and police struggle to access mainstream credit due to a thin credit file, often due to a lack of address history while on deployment, or lower or fluctuating incomes as a result of shift work. This can leave them having to turn to high-cost lenders such as payday or guarantor loans, which can result in a spiral of debt. The Affordable Credit Challenge is a £1.5m prize, run in partnership with HM Treasury, which encourages UK fintechs and community lenders to work together to ensure people are able to access alternatives to high-cost short-term credit. At present, high-cost lenders have access to data and technology that community lenders often do not, making it difficult for them to compete. Through the partnership, Police Credit Union and Credit Kudos hope to level the playing field and, ultimately, support more borrowers. The winning solution from Credit Kudos and Police Credit Union is a reward loan which supports those in the police, military and wider protective services family. The product uses Open Banking to monitor a borrower’s behaviour and automatically reduce the interest rate they pay as they develop healthy financial habits over time. The broader partnership between Credit Kudos and the Police Credit Union has already received over 1,800 completed applications, with a 15% increase in acceptance and a 30% reduction in application processing time. Freddy Kelly, chief executive officer of Credit Kudos, said: “We are thrilled to be winners of this prestigious prize from Nesta Challenges and HM Treasury. Credit unions and community lenders provide an invaluable service to often overlooked, or harder to reach, borrowers. But, to date, new technology and data have been out of reach to many of these firms making it harder for them to compete with larger, high-cost credit providers. “The solution we developed with our partner Police Credit Union will enable its members to access fairer, more affordable credit than previously possible, meaning they won’t have to resort to high-cost borrowing. This solution will be a blueprint for what can be achieved across the entire community lending sector. We look forward to helping even more lenders support their customers.” Paul Norgrove, chief executive officer of Police Credit Union, said: “We exist to provide affordable loans for our members and always want to treat them as individuals — not just a credit score. Our reward loan solution, created with Credit Kudos, allows us to support even more members and reward them for healthy financial behaviours. Using Open Banking derived scores, the solution will automatically adjust the interest a borrower pays during the life of a loan. This means borrowers from the police, military and wider protective services family can proactively and positively impact their own financial situation.” The announcement brings the total amount Credit Kudos and Police Credit Union has won to £350,000. They were awarded an original £150,000 when they were announced as a finalist in November 2019 in order to allow them to develop their solution further.
11
Up Close
THE BIG INTERVIEW Steve Tigar Chief Executive Officer, Money Dashboard
Next up Open Finance As the UK considers the benefits of Open Finance, Open Banking Expo Magazine catches up with Steve Tigar, chief executive officer of Money Dashboard, who is hoping his company will be a huge beneficiary of the forthcoming transition. Joe McGrath reports
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efore it was postponed due to the Coronavirus emergency, the UK’s Financial Conduct Authority was due to close its consultation on an Open Finance framework on March 17, 2020. It had sought opinions from consumers, banks, fintechs and businesses across financial services for three months. Already considered a leader in Open Banking, the industry is now looking to the next stage of the development, the concept of Open Finance. This world, where the consumer can access all their financial information in one place, including current accounts, pensions, investments, credit cards, finance agreements and mortgages, has been tipped to transform the way Britons live their day to day lives. With more than 500,000 registered users, Money Dashboard is one step ahead of the curve, offering consumers a financial services one-stop-shop. “Open Banking attempted to prise open the restrictive grip that banks had on their customers and their data,” explains Mr Tigar. “Open Banking APIs standardised access for regulated firms. They enable them to provide numerous services
Open Banking attempted to prise open the restrictive grip that banks had on their customers and their data. Steve Tigar
12 O P E N B A N K I N G E X P O . C O M
to customers from personal financial management to credit management tools, all through seamless secure connections.” Mr Tigar admits that while some of these innovations have worked, it has taken a strong-arm approach from regulators, in some instances, to make it happen. “Some of this has worked but it had to be mandated by legislation under the Payment Services Regulations and somewhat under duress by some of the banks.” A different beast He believes, though, that Open Finance is a different beast, however, as all regulated firms offering products from mortgages to insurance will be forced to open up access to their client data sets. “The rationale for this, like Open Banking, is to enable consumers to consolidate their financial records in one secure location.” Money Dashboard launched in 2010 to help people to take control of their financial life via its personal finance app. It gives consumers the ‘TrueView’ of their financial position by consolidating all their current accounts, credit cards, savings and investment accounts from more than 40 financial institutions, and allocating each bank transaction into a distinct expenditure category, thereby automatically organising an individual’s finances for them. Data collection While the app itself is free for consumers to use, the company generates revenue by creating market research from anonymised bank statement data. › Apr/May 2020
Up Close
13
Up Close
The challenge faced by the financial services industry is whether Open Finance will be mandated by legislation to set out standards such as APIs, client data portability and liability rules for customer loss cut their monthly bills – a first for a UK bank. Steve Tigar
› Mr Tigar gives various use cases for this data, including allowing hedge funds to predict revenue announcements of listed companies. In 2019, Money Dashboard completed a funding round, which attracted investment from more than 3,300 investors to the tune of £4.6 million via crowdfunding platform, Crowdcube. The company reached its initial target of £1.5 million in under 45 minutes, making it the largest fintech raise 14 O P E N B A N K I N G E X P O . C O M
on Crowdcube in 2019. Mr Tigar says that the funds are being used to build out the app and triple the company’s Edinburgh-based team from 20 to 60 staff, adding “We are now equipped and ready to help people from every walk of life master their money.” Regulation challenges The FCA’s vision to extend the idea of Open Banking to areas of the market including insurance and mortgages has
the potential to transform financial services for consumers. However, it is clear that it will take a while for other areas of financial services to come on board – not least because each industry has its own regulator and standards to adhere to. “The challenge faced by the financial services industry is whether Open Finance will be mandated by legislation to set out standards such as APIs, client data portability and liability rules for customer loss,” Mr Tigar explains. An additional challenge is the ability for some of the more established, or incumbent, financial institutions to keep a pace with the advances in technology required to really embrace an Open Finance framework. Previously, in Open Banking, this is where fintechs and smaller, nimble start-ups were able to gain traction – offering their expertise to the banks without much disruption for the end customers. “It is clear that some parts of the industry are only just starting the digital revolution let alone build digital gateways for third parties to share their client data,” Mr Tigar concludes. “For some firms there is little incentive to ‘open’ up to other regulated firms, but others are embracing the opportunity to enhance their clients’ experience by providing a holistic view of their financial wellbeing.” ■ Apr/May 2020
POWERED BY
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Mar/Apr 2020
SCA
SCA: the new saviour? Will Strong Customer Authentication rules help banish fraudsters and build consumer trust? Joe McGrath reports
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ncidents of online fraud are on the increase, with fraudsters using ever more sophisticated techniques to target shoppers paying for goods and services. According to Jason Tooley, chief revenue officer at authentication platform Veridium, one in five UK adults were impacted by online card fraud in 2019. The Dedicated Card and Payment Crime Unit, a specialist police unit funded by the banking industry, reported in March that it had prevented £31.2m of fraud and disrupted 23 Organised Criminal Groups in 2019, including taking down more than 1,600 social media accounts linked to fraudulent activity last year. The regulator has also stepped in to require businesses that transact online to increase the security of payments. Under the EU’s revised Payment Services Directive (PSD2), the e-commerce and payments industry must implement Strong Customer Authentication (SCA), overseen by the Financial Conduct Authority (FCA) in the UK. SCA – also commonly referred to as Secure Customer Authentication – requires banks and payment providers to establish that a consumer really is who they say they are through ‘authentication’. This has already been rolled out across Europe back in September 2019. ›
While faltering trust could be a brake on the online economy, given the ongoing growth of online transactions, it’s not clear those brakes are being applied in any meaningful way right now. Iain McDougall, UK Country Manager, Stripe 17
F E AT U R E / S C A
service providers to use to inform customers about SCA. According to a spokesperson for UK Finance: “The rollout plan agreed with the FCA will help the industry ensure a timely migration to SCA and result in the best outcomes for consumers while effectively balancing both convenience and security. “The banking and finance industry is working closely with the FCA, retailer groups and other stakeholders to deliver these required changes in a way that minimises any disruption for consumers and businesses.”
› But the European Banking Authority along with the FCA agreed that, among other things, a “lack of industry preparedness” in the UK meant the deadlines for implementing SCA were extended to 14 March 2020 for online banking and to March 2021 for the payments industry, which includes card issuers, payments firms and online retailers. Tackling trust In the meantime, consumers will continue to be at risk of fraud and are likely to be increasingly concerned about their online security. Will the SCA rules help banks and merchants to re-gain some of the trust that consumers may have lost in them? Iain McDougall, UK country manager for payments platform Stripe, says: “While faltering trust could be a brake on the online economy, given the ongoing growth of online transactions, it’s not clear those brakes are being applied in any meaningful way right now. “Although some people will have lingering concerns about the safety and security of making online payments, the reality is that a rapidly increasing majority of the population are now used to buying things online.” Figures from Veridium show that online banking and payment platforms are now used by more than two-thirds of British adults, with 48 per cent using mobile banking. A spokesperson for UK Finance adds: “Fighting fraud must be a priority for everyone and these new rules will be an important tool in protecting customers, helping keep them safe when they shop online.” Looming deadlines While the e-commerce industry has another year in which to make sure it complies with SCA, the worry is that some of these businesses will become complacent. UK Finance says it has been working with its members to not only prepare for the changes but also to ensure they are being communicated to customers and retailers. It has produced a ‘communication template’ for payment 18 O P E N B A N K I N G E X P O . C O M
Potential solutions include new tools to enhance productivity and deliver insight on business performance. Chris Allen Digital & Innovation Director, Axis Corporate
Trust erosion If these industries fail to meet their respective deadlines, the cost to firms could be more than a fine – it could seriously harm consumer trust. “While SCA can help reduce fraud, it also has the potential to add friction into transactions, and even create transaction failures if merchants aren’t ready by the time the rules come into force,” cautions McDougall. “Failed transactions and more friction can make for bad experiences, and this also runs the risk of eroding trust.” He explains: “We’re working closely with merchants and banks, including plans to rollout live testing of SCA in the coming weeks, to make sure we don’t hit a cliff edge at the end of the year.” “A failure to integrate Strong Customer Authentication demonstrates a disregard for consumer protection – it should have been prioritised long ago and viewed as a business differentiator,” says James Stickland, chief executive officer of Veridium. What about those banks that only have a few days left to meet the March deadline? Strickland suggests that if they are to meet the looming deadline, they should be “turning to technologies in the market which have the potential to alleviate the challenges posed by the regulation”. He adds: “Multi-factor authentication solutions can facilitate financial services institutions to enhance consumer confidence and create a secure experience, while ensuring the customer has a frictionless user journey.” ■ Mar/Apr 2020
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anks will use a combination of acquisitions, partnerships and innovating within their organisations in 2020 to offer services from which their customers can pick and choose, according to a panel of industry experts. In an Open Banking Expo live stream on 27 February, HSBC’s Open Banking director Hetal Popat called it “an environment of unprecedented change”, with technology “fundamentally changing the way customers experience all services”. All five of the panel, comprising Andrew Smith, head of CBX at ClearBank, Lana Abdullayeva, nonexecutive advisor to PAY.UK, independent speaker and director at Lloyds Banking Group, James Maudslay, senior manager, financial services at Equinix, Janine Hirt, chief operating officer at Innovate Finance and HSBC’s Popat, agreed it was not an issue of which approach the banks would choose when it comes to working with challenger banks and fintechs. “It is very much how can we combine all of these different strategies as we’re looking to transform digitally internally, and also trying to create the best proposition for the end client and consumer, while reducing costs and increasing efficiency as well,” Hirt said.
Abdullayeva suggested banking would become a “Chinese menu” from which customers “pick and choose” what they would like. Maudslay acknowledged the cultural issues that can arise when an incumbent and a fintech collaborate, saying it can “get into a supplier/customer-type relationship which maybe doesn’t fulfil the promise of a partnership”. Nevertheless, many on the panel predicted they would see a number of partnerships established in 2020, including Hirt, who added these would “focus on really engaging the end consumer”. Another issue that the panel discussed during the live stream was consumer trust and how the regulator might play a role in that. Popat said the regulator is “looking for the industry to innovate,
create new opportunities for customers and that they’re going to see how it plays out” and that if there were “areas where potential consumer harm may arise, we may need regulation to fix that”. When asked to predict what the bank of the future might look like, Smith said he sees banks being a lot more like utilities, with “banking as a feature, not a service”, while Maudslay forecast they are “going to be an extremely flexible organisation”. ■
Watch the full broadcast on demand at: openbankingexpo.com/ live-streams/
It is very much how can we combine all of these different strategies as we’re looking to transform digitally internally, and also trying to create the best proposition for the end client and consumer, while reducing costs and increasing efficiency as well. Janine Hirt Chief Operating Officer, Innovate Finance
21
Insight Rishi Chauhun Strategy Director, Haydon & Company Limited
“The bank or building society is still seen as having primary responsibility for addressing fraud and security issues.”
O
pen Banking presents consumers with an immense opportunity to move, manage, and make more of their money. For most consumers, it is an opportunity to get tailored financial products and services that better meet their needs. For others that are currently underserved, Open Banking represents better access to financial services. However, consumers are concerned about giving lesser known fintech brands access to their accounts. Concerns revolve around the unintended consequences of sharing data: • What could be inferred from their data (e.g. net worth, credit history) • Will their data and identity be protected in the same way as their bank or building society does? • Which other parties may be able access their data and could that lead to a detriment.
In the payments context, this translates into concerns around potential payment fraud and having the same level of protection through Open Banking as they would using cards. Overall, consumers are concerned about the level of accountability amongst fintechs and how they would get redress when something goes wrong. The bank or building society is still seen as having primary responsibility for addressing fraud and security issues. These concerns may present barriers to significant consumer adoption beyond the early adopters, so what can fintechs do to gain consumer trust? In addition to directly addressing the above concerns, fintechs have the following two powerful anchors of trust at their disposal: 22 O P E N B A N K I N G E X P O . C O M
Clarity on the value exchange Utility and needs always trump concerns and reduce the perceptions of risks. Consumers are willing to share their data as long as they are clear on the benefits to them: • How will the fintech’s product or service meet their needs? • What will they be exactly getting in return for sharing their data? The fintech will have an even stronger benefits messaging if answers to those questions are coupled with trust messaging that reassures on data security and their regulated status. Fintechs should clearly communicate their benefits and trust messaging to consumers at the following two levels: • Communicate the overall benefits of the fintech’s value proposition through their market messaging and through their customer experience as early as possible in the customer journey • Communicate the specific value or the benefit consumers will get in return for sharing their account information, just before the account information sharing request is made within the customer journey. This may be a reminder of the overall benefits or may be a specific benefit they may get just for sharing their data An example to bring this to life: A credit card provider that may provide tailored interest rates (overall benefits) to consumers based on assessing their account information. They may also provide the consumers a snapshot of how high their current credit costs are and the costs savings to them, if they were to switch, as a specific benefit for sharing their data.
In a payments context, the specific value exchange for making a payment using Open Banking could be loyalty points or discounts, or buyer protection programmes. Consumers in control Consumer choice and control are seen as the key benefits of Open Banking. Historically, consumers have felt a lack of control in dealing with their bank or building society, consumers felt that their bank or building society has much more information and market power. With Open Banking, consumers now have a greater choice in terms of who they get their financial products and services from. Consumers can now also decide who they share their data with amongst the alternative providers, bringing greater balance to market power. Fintechs should make the most of this need for control and build trust by emphasising consumer choice and control through their market messaging and customer experience. An example to bring this to life: As part of the Open Banking customer experience, fintechs have to request consumer consent before requesting their data from their bank or building society or making a payment on the consumer’s behalf. Fintechs can build trust by making this step in the customer journey as engaging as possible: • Such that it does not remind consumers of terms and conditions e.g. by using icons and images to enhance scanning and comprehension • By using a tone that emphasises consumer control and choice • By maximising comprehension of exactly which data will be requested, for what purpose and for how long. ■ Mar/Apr 2020
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FUTURE FOCUS
“The past is written, we are here to shape the future...”
S Navigating digital future through the crisis to the recovery Open Banking Expo Magazine caught up with Lana Abdullayeva, non-executive advisor to PAY.UK, independent speaker and director at Lloyds Banking Group, on what her predictions are for the future in these uncertain times.
Lana Abdullayeva Non-Executive Advisor, PAY.UK, independent speaker and Director at Lloyds Banking Group 24 O P E N B A N K I N G E X P O . C O M
ince the beginning of 2020 I have participated in a series of debates and pan-industry panels about the future of digital financial services and its evolution. The journey of face to face events and the live streaming of in-person interviews has gradually moved to a world of virtual web conferences as the threat of the global pandemic rapidly increases. In the current exceptional circumstances, this article continues the thought-provoking discussion of the digital future and its critical role through the crisis and towards the recovery. My personal experience of growing up behind the Iron Curtain and witnessing it collapse from within, allows me to reflect and look at the current circumstances with a little wisdom from experiences of the past. For those outside the Iron Curtain, the collapse of the Soviet Empire is mostly associated with more freedom and transparency. Though it definitely did bring a fresh air of new opportunities, it also broke all the existing economic relationships of that part of the world and created significant political turbulence and economic instability. Being in the epicentre of rebuilding the new world taught me one main thing – it is never too early to start planning for the recovery. Let’s bring it back home to the UK now and reflect on our current environment. As the tech revolution has rippled across industries in the past few years, we have seen the revolutionary potential for disruption. This changed both regulatory and customer expectations, gave easier access to both massive volumes and different types of data, along with the potential to completely transform the industry landscape. Increased data literacy has shifted the value exchange from the competition for the amount of data collected, to the analysis of the data and information it delivers as a result. In 2018, European banks entered a new era as they were tasked with
delivering safe and secure account access to regulated third parties. The UK’s Competition and Markets Authority (CMA)’s Retail Banking Market Investigation Order 2017 set up the Open Banking Implementation Entity (OBIE) to deliver Open Banking. Since then, we have seen an unprecedented level of collaboration amongst banks, fintechs, regulators and consumer representatives to make Open Banking a reality. Open Banking started to transform the banking world. This introduced the potential to pave the way for Open Finance, which would include more financial products and services beyond just payment accounts. As per the 2019 estimates, there were circa 5.9m SMEs in the UK. There is an engine of growth, employing up to 60% of the private sector workforce and contributing to nearly 50% of UK GDP. Support and funding of SMEs remains a critical factor to drive the evolution of the market and economy, with technology and data increasingly playing a significant role in this. A new ecosystem with greater access and additional data helps SMEs to find better finance options for them to thrive. The UK government announced an independent review of the K fintech sector with a view to enhance investment and support, foster growth, innovation and competitiveness in the industry. Fintech has been the UK’s top performing sector for a few years now, contributing more than £130bn to the economy annually. Disruptive ideas and radical technological advances are shaping our market and our lives – ever more powerfully and in ever expanding ways. Many people are afraid of what the future might bring. Given the current uncertainty, of course it is very difficult to quantify the impact of the pandemic crisis or model the recovery path yet. However, the future is something we have the ability to actively influence and shape. Let’s explore the opportunities and the challenges we are facing. Mar/Apr 2020
The FS system of the past was built based on the distribution of localised physical assets and for the past few decades we have been successfully automating it. So, from the horses we gradually moved to cars, trains and then faster trains. The traditional thinking starts with defining the process, promptly followed by building teams, utilising existing tools and deploying various technology solutions – all operating within the familiar hierarchy of organisational pyramid structures. The organisational structures are tagged onto the firm’s business model and strategy, rather than being explicitly designed to maximise effectiveness both of customer experience and risk management. This approach leads to an array of point solutions to achieve individual objectives and semi-manual operational checks. Tech solutions are quite fragmented and aim to automate processes within established structures. As a result, they achieve incremental efficiency improvement but do not support neither holistic and proactive governance nor an effective and sustainable control environment. This impairs productivity and can impact customer relationships, presenting an obstacle to a sustainable growth. The technology revolution and Open Data brings us to the new era of creating planes, adopting new concepts and navigating different trajectory. It is not about the age of the company, nor is it about its size or value of its assets. It’s about how outward looking they are, how curious they are and whether they think their role is to create the future or to cope with it. In the growing world of virtual assets and global distribution, it is important to consider and deploy new methods. We have opportunity to leverage technology and data to simplify and provide access to products, as well as to enhance customer experience. This will not be achieved by automating structures of the past, we have to look for fresh ideas and designs. Forward-looking businesses are pushing towards a digital and
“The technology revolution and Open Data brings us to the new era of creating planes, adopting new concepts and navigating different trajectory.”
customer centric model, with data and analytics shaping vision and strategy. This places data and technology at the core of enabling organisational strategy and governance, driving informed risk direction from the top rather than accessorising existing processes. Thus, business strategy and risk management are designed and executed in tandem, so as to avoid common issues of customer friction and poor outcomes on either sustainable growth or risk objectives. The first weeks of the pandemic stress however clearly indicated that we continue to rely on the traditional industry players, core services and tested structures in the times of severe crisis. We are also increasingly learning the value of technology, connectivity and digital distribution in a wider sense. Pace of change, technology revolution and increased data literacy over the past years, have already introduced new requirements and high expectations of flexibility, transferrable skills and dynamic learning abilities. These are definitely proving to be critically important during these challenging weeks of the current crisis. The evolving world will continue to challenge us for a need of open collaboration, agile working and effective prioritisation; courage facing unknown and uncertain territories; focusing on solving old and new problems with brave decisions and innovative solutions; exercising diversity of thoughts and creativity of thinking; learning from the past and experimenting for the future; sharing infectious energy and positivity with each other to drive the world forward. A more inclusive ecosystem and modern market infrastructures will galvanise the emergence and coexistence of new business models and increased cross-industry connectivity. This gives a rising potential to develop novel partnerships and create innovative and competitive products and services for the benefits of end users, consumers and businesses alike. ■ 25
F E AT U R E / O P E N F I N A N C E
How can we accelerate Open Finance adoption? Joe McGrath reports
I
n December 2019 the UK’s financial watchdog asked the industry for feedback on its vision for ‘Open Finance’ which it claims could “transform the way consumers and businesses use financial services.” The UK has led the way in Open Banking after it was introduced in 2018 to increase innovation and competition within the sector. The Financial Conduct Authority believes the advances being made here could easily extend beyond just banks, improving the ways that consumers and businesses carry out their dayto-day activities. “Open Finance is, in effect, an extension of Open Banking principles to a wider field of financial services and products. It is a natural and expected progression,” explains Eyal Nachum, co-founder at fintech company Brüc + Bond. ›
26 O P E N B A N K I N G E X P O . C O M
Mar/Apr 2020
OPEN FINANCE
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F E AT U R E / O P E N F I N A N C E
› “Open Banking has been a tremendous success. It has allowed a whole industry to spring up and provide services in those gaps banks were leaving neglected. Corporate and retail NBFI services are blooming, and customers are the big winners. Open Finance has the potential to take it much further.” Open Finance applies the same principles of Open Banking to all the different financial services, including insurance, mortgages and pensions – removing some of the barriers that currently exist between them. Traditionally these financial services have been siloed, creating friction for the customer. Take a mortgage application as an example. Currently the customer needs to manually access all the various bits of information required, from payslips to different bank accounts and other financial data. An Open Finance system will enable a much smoother process as all of this information will be readily available to third party providers. Consumer engagement key However, the FCA recognises that the success of an Open Finance framework is dependent on the consumers being prepared to engage and be willing to allow third party providers to access their personal and financial data. Imran Gulamhuseinwala, trustee of the Open Banking Implementation Entity (OBIE), believes the implications of Open Finance are far reaching, with the potential for vast growth in sectors as varied as pensions, insurance, payments and investments, to name a few. “No project in line with the scope and reach of Open Finance has ever been attempted before, and therefore, the potential for innovation as a result of collaboration between incumbents and 28 O P E N B A N K I N G E X P O . C O M
traditional organisations to create new offerings and build stronger, more personalised experiences with customers.”
It will likely take some time before we start to see full integration of financial services. Imran Gulamhuseinwala Trustee, Open Banking Implementation Entity (OBIE)
challengers is unprecedented,” he says. “Given its importance and primary objective of empowering consumers and small businesses to exercise their basic right to access their data and share it with third parties, it would appear reasonable that Open Finance be a mandatory requirement for incumbent providers.” One major benefit of being able to share accurate customer data is that businesses will be able to sell more appropriate products and payment plans to the customer and, as a result, we’ll start seeing more integration of financial services, according to Tim Hooley, FSI chief technologist EMEA at open source company Red Hat. However, he cautions that this won’t necessarily be plain sailing as these financial services are currently regulated by different bodies and have different industry practices. He says: “It will likely take some time before we start to see full integration of financial services. What’s needed now is for firms to apply a less rules-driven and more imaginative and innovative mindset towards managing financial transactions. “There is a huge opportunity for
Legislation needed? The challenge faced by the financial services industry is whether Open Finance will be mandated by legislation to set out standards such as APIs, client data portability and liability rules for customer loss. “It is clear that some parts of the industry are only just starting the digital revolution, let alone build digital gateways for third parties to share their client data,” warns Steve Tigar, chief executive officer of the free online personal financial management service, Money Dashboard. “For some firms there is little incentive to ‘open’ up to other regulated firms, but others are embracing the opportunity to enhance their clients’ experience by providing a holistic view of their financial wellbeing.” Prior to its extension, the FCA’s call for input deadline was March 17, 2020 and the next steps for Open Finance are no doubt being eagerly awaited by consumers and business alike. For Stefano Vaccino, founder and chief executive officer of third party provider Yapily, the implications are significant, none more so than on financial services themselves. “We cannot even imagine what products and services will be created when consumers have absolute control over their own banking and financial data,” he explains. “But the true promise of Open Finance lies in consumers being able to get offers for financial services based on what they actually spend, rather than on estimates or giving providers unsecure access to their financials. It will be fascinating to watch Open Finance become a reality.” ■ Mar/Apr 2020
VIEW FROM THE TOP
David Beardmore Ecosystem Development Director, The Open Banking Implementation Entity (OBIE)
I
n January this year, the Open Banking Implementation Entity (OBIE) announced as part of its 2019 review that Open Banking in the UK had surpassed one million users, and this was continuing to climb. Given my connection to Open Banking since inception, I viewed this as a real tipping point - demonstrating tangible proof of Open Banking’s ideals – bringing more innovation, and more competition to financial services. In fact, in September 2016, two days after joining the Open Data Institute (ODI), I witnessed Bill Roberts, Head of Open Banking at the Competition Markets Authority (CMA), announce the publication of the report; “Making banks work harder for you”, which kickstarted the Open Banking journey. On launch day, September 2018, I was invited onto the BBC Breakfast sofa to explain the benefits of Open Banking. I was a big fan of Open Banking then, and I still am. While not perfect, or offering all the answers (yet), it has already led to positive changes in the world of banking. I believe it is here to stay, and that the benefits of Open Banking will continue to be felt by consumers, businesses and society. While I recognise the technical work that is required to bring about change of this magnitude, we must remember that Open Banking is not a technical concept. Yes, APIs are central to Open Banking, but Open Banking is also about the consumer. Those who give consent to approved and regulated third parties, who will then deliver beneficial products and services. Our call to action at Open Banking
is also a response. How can having a more detailed understanding of their accounts, help consumers find new ways to make the most of their money? How might those struggling with debt, access better advice? The answer is Open Banking. The SME sector will also benefit hugely from Open Banking. OBIE proudly supports the NESTA Open Up Challenge, which identifies fintechs and supports them as they bring innovative new Open Banking propositions. Past finalists have developed cutting-edge tools for small businesses such as ‘credit passports’ updated in real time; and marketplaces which enable small businesses to plug into additional fintech apps via their bank account, to name a few. I joined ODI at a seminal time for the industry, and the same can be said of OBIE, where I became Ecosystem Development Director this past March. The vision I have for the Ecosystem team I’m leading is all about long-term end-user adoption, delivering tangible benefits and improving the lives of consumers and businesses. Our role is not only to encourage the banks and fintechs to develop new products, but to work alongside them, playing a vital supporting role in bringing forth these changes. As businesses recognise the significant benefits of immediate settlement, lower transaction fees and fewer opportunities for errors, the growth of Open Banking payments solutions (PISPs) will follow. Of course, we are currently living through unprecedented times and the shockwaves of Covid-19 will long be felt on our societies and economies.
With this is mind, we launched the #powerofthenetwork campaign in April to shine a light on how the Open Banking community is supporting consumers and businesses across he UK in these difficult times. Some are aimed at society’s most vulnerable, such as Covid Credit, a scheme allowing the self-employed and furloughed workers to prove that their income has suffered as a result of COVID-19. Others include Tully’s payment relief resource, iwoca’s new Open Lending platform, Swoop Funding’s coronavirus hotline, and the creation of Fintech Taskforce, an initiative led by Trade Ledger, Wiserfunding, Nimbla, and NorthRow. A number of our TPPs have removed the fees for their products and services, with relief periods introduced by TrueLayer, Experian, and Moneyhub, amongst others. Others have thrown their weight behind public campaigns, with Coconut calling on the Chancellor to do more for self-employed people. Meanwhile, Toucan has updated its features to support customers with mental health issues, and Nuapay is helping to channel donations to the NHS. Seeing the way, in just a few weeks, the developing Open Banking ecosystem has stepped up to make a difference, no matter how small, is why the OBIE pillars of collaboration and innovation are integral to the financial revolution we are driving. Reaching one million consumers was just the first milestone of many to come, our goal is to ensure that a substantial proportion of people and businesses use a range of Open Banking-enabled services on a regular basis. ■
Our role is not only to encourage the banks and fintech to develop new products, but to work with them. 29
Insight Marcus Martinex Director, Head of UK Open Banking, CGI
“The young Open Banking ecosystem, just like the ocean, is uncharted and volatile territory; an uneven surface subject to unexpected waves, winds and storms.”
D
ivers are not necessarily good swimmers and vice-versa. The fact that they both work in the same environment does not mean they have the same skill sets or can accomplish the same tasks with the same efficiency. Ocean deep diving is a sport that requires a lot of preparation. With the right amount of conditioning, you can go really deep. A lot of preparation is required to ensure that your body can cope with the increasing amount of pressure that would otherwise be very harmful. Swimmers, on the other hand, are not concerned with the depth of the ocean. Their focus is on speed and streamlining, which requires equal amounts of preparation, but with a different goal. The important factor for a swimmer is ensuring that their body has enough stamina and resistance to enable them to cover long distances in the shortest time; the depth of the ocean is irrelevant. Incumbents, just like divers, don’t necessarily have the speed and agility of swimmers, but they have strong lungs and can go very deep, touch the ocean floor and bring back to the surface extremely valuable artefacts, like granular customer data (the treasure in this new banking era). Challengers and fintechs, like swimmers, don’t necessarily have the lungs required to go deep in search f treasures at the bottom of the ocean, but they have the agility and speed required to break (or ride) the waves and avoid obstacles. The young Open Banking ecosystem, just like the ocean, is uncharted and 30 O P E N B A N K I N G E X P O . C O M
volatile territory; an uneven surface subject to unexpected waves, winds and storms. However, the ocean is big enough for divers and swimmers to coexist. In fact, in the right circumstances, they can actually complement each other. They can compete and collaborate at the same time; some call it “coopetition”. In isolation, it’s very unlikely that financial services organisations will be able to offer a much better customer experience going forward. There is no strong economic incentive for incumbents themselves to build business capabilities already available in the fintech sector, one API away. Open Banking creates an opportunity for incumbents to externalise and acquire non-core business functions through open APIs, unlocking bandwidth to focus on core business capabilities and enhanced customer experience. A compelling use case that demonstrates the Open Banking potential is Smart request, which offers flexibility, transparency and control to customers on how (and when) to pay for products and services, traditionally an opaque and inflexible journey. A new UK start-up, Ordo, in partnership with CGI, shows how Smart request allows customers not only to control the payment process but also receive contextual information embedded in the payment request, like digital invoices or pictures as evidence of service completion (e.g. car repairs, building works, etc.). New Open Banking services like Ordo, enable a superior customer experience that
will certainly become the new standard over the next five years and help businesses to realise operational savings through automation (e.g. automated reconciliation, paperless adoption, etc.). When you consider the advent of innovative Open Banking services like Ordo, it becomes clear the depth and breadth of open business capabilities offered by the fintech sector, which keeps growing especially in the UK. As a bank, with so many fintech partnership opportunities available, the critical decision is to define which role your organisation wants to play in this nascent digital ecosystem. Do you want to be a diver or a swimmer? Both options are valid, but only one can be chosen. If you find yourself unable to make this decision, there is no need to worry. The market will make it for you, after all, you cannot thrive in the ocean without a clear purpose. ■
➽ If you would like to comment on this opinion piece, please email us at: editorial@openbankingexpo.com Mar/Apr 2020
Insight
Ruta Merkeviciute Head of Division, E-money and payments institution supervision, Bank of Lithuania
“It is estimated that 10 years from now there will be 125bn connected devices in the world; an average of 15 devices per person that produce data every day.”
T
he revised Payment Services Directive (PSD2) in the European Union (EU) marked an important shift towards the sharing and use of customer data by banks and third party providers to create new services. International institutions such as the Euro Retail Payments Board, Bank of International Settlements, and the European Commission have begun looking to replicate the same PSD2 principle of Open Finance in insurance, investment and lending industries, and even beyond financial services. If we looked to the bigger picture, banking services are just part of a data bubble that a person lives in. Customers are daily exposed to telecommunications, retail services, social media, utilities, e-commerce, health and government infrastructure, where each leaves one’s footprints. It is estimated that 10 years from now there will be 125bn connected devices in the world; an average of 15 devices per person that produce data every day. In order to access this data; there is a need both for the technical enablers and a legal foundation, and customer demand drivers. Starting with the technical enabler, undoubtedly the biggest victory of PSD2 and therefore Open Banking, is a technical standard for interchange of data; a common and secure open standard of communication (API) between payments service providers that drives the PSD2 initiative forward. Secondly, taking into account legal enablers, the use of data beyond payment accounts and out of scope of PSD2, depends on the applicable legal context and mostly the data privacy
law. Data privacy laws in some jurisdictions view the service provider as the data owner, but limit their rights to control the use of such data to the boundaries of the consent provided by the customer. Other legal frameworks, including General Data Protection Regulation (GDPR) in the EU, are anchored on the principle that the customer owns their data and has the right to control it. GDPR embeds the right of data portability allowing the direct transmission of personal data, including data generated by a person’s activity, from one data controller to another in a structured, commonly used and machine readable way. What it actually means is that a financial institution might ask to transfer customer-permissioned data from a telecommunication service provider and vice versa. There is no obligation, according to the GDPR, for compatible systems between data controllers to address data portability requests. However, there is a need for interoperable formats and systems, and APIs, in light of PSD2. Thirdly, in order to acquire a customer’s permission to use their data and to benefit from the right to data portability, it is also an important that this free flow of personal data creates value for the customer. While describing the economic value from a customer perspective, economists have indicated that it changes over the decades. In early 2000 they saw the shift in modern consumer culture from a goods-based economy to an experience-based economy. Whilst we
are now a technology-driven society, it is not only about the authentic experience, but also a personalised one. Amongst this shift to expecting a personalised experience, it is important to consider that humans may not be rational or good at making decisions, but they have a relentless desire to improve themselves. Trend watchers claim that there is a tendency towards motivated mindlessness, meaning that people value services that help improve themselves and their decisions. The progressing digitalization of almost every area of life and machine learning, artificial intelligence and analytics capabilities, enable companies to transform random data trails into meaningful insights. The ability to combine data from various sources into large datasets, and find correlation to spot business or human trends, could lead not only to targeted and personalised marketing that consumers are already accustomed to, but also enable the consumers to benefit from personalised services. Therefore, the winners will be those service providers that, based on the behavioural patterns of their customers, will provide customers with new forms of information, personalised solutions and offer them what they did not even know they wanted or needed. Practically what it means, is that there will be no default services but only services adapted to a particular client. If Open Banking in Europe is used effectively, in 10 years time we will be able to indicate the acronym PSD2 as a catalyst of Personalised Service Delivery To a customer. ■ 31
F E AT U R E / D I G I TA L C U R R E N C Y
Centralised thinking As interest and excitement builds in central banks’ involvement in the development of digital currencies, they have more fundamental milestones to achieve
I
Jenny Turton reports
n recent times, the actions of the world’s central banks have regularly been under the media spotlight, as they seek to control the economic fallout from the ongoing Covid-19 outbreak. “Money and payment systems are founded on trust in the currency, whether that’s cash or digital,” explains Agustín Carstens, general manager at the Bank for International Settlements (BIS). “This trust is something that only the central bank can ensure.” It’s interesting then, that against the backdrop of the ongoing pandemic, central banks found themselves in the news for different reasons at the end of March, when researchers highlighted their growing interest in digital currency infrastructure.
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Mar/Apr 2020
Dedicated mandate The hub’s mandate is threefold. Firstly, it looks closely at critical trends in financial technology and develops in-depth insights based on the relevance to central banks. Second, it explores the development of public goods to enhance the way the global financial system functions. Finally, it serves as a focal point for a network of central bank experts on innovation. ›
At the time, Open Banking Expo reported on the CB Insights Report, which found that central banks are becoming increasingly interested in launching state-owned digital currencies. The research noted the ongoing cryptocurrency initiatives including China’s CBDC project and France’s $2.8bn digital euro project. With central bank digital currency innovations moving on at such a pace, industry experts are calling for central banks to do more to protect the security of the payments sector. Mr Carstens says that it’s time for the central banks to “step up,” arguing the need to “play a more significant part in improving the safety and efficiency” of markets. The BIS is playing its part, having built a dedicated ‘hub’ to foster international collaboration on innovative financial technologies.
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D I G I TA L C U R R E N C Y
F E AT U R E / D I G I TA L C U R R E N C Y
› Mr Carstens explains that, as the hub gathers experience, a home-grown agenda will quickly be developed. “Initially, the hub will build on the efforts of central banks that have made significant advances in digital innovation. In doing so, it will catalyse collaborative efforts among central banks, and co-operate, when appropriate, with academia, financial service providers and the broader private sector to develop public goods for the benefit of the global financial system,” he says. However, according to the BIS, a key question informing the work of its Innovation Hub is whether money itself needs to be reinvented for a changing environment, or whether the emphasis should be on improving the way it is provided and used. Cross-border payments One headache that continues to dominate discussions between all collaborating parties is the issue of cross-border payments. High costs and a lack of diversity in products or services has long-plagued cross-border payments, but technology could finally be expanding the options, thanks to the mass arrival of new fintechs and big tech firms keen to develop initiatives. “There are currently a small number of functioning examples, including in
34 O P E N B A N K I N G E X P O . C O M
Mexico, South Africa and Switzerland, but more such initiatives are being implemented or planned,” Mr Carstens explains. “If successful, these initiatives could help bank-based payment systems remain competitive with alternative arrangements.” The holy grail is to ensure the complete linkage of all domestic banking systems, to enable foreign banks remote access for cheaper, secure and transparent cross-border payments.
There are currently a small number of functioning examples, including in Mexico, South Africa and Switzerland, but more such initiatives are being implemented or planned. Agustín Carstens General Manager, Bank for International Settlements (BIS)
Bill Wrest, senior strategist, cash management solutions at software company GreshamTech, explains why this has so far proved a stretch too far for global organisations. “This can frequently be restricted by volume and incompatible file formats (i.e. not SEPA). Most corporates and financial institutions have learnt to live with the constraints of cross-border payments, but this simply should not be the case.” The BIS has already sought G20 support for its plan to identify a roadmap for an improved payments system that will streamline remittances that are usually caught in the complex processes and subject to high costs and delays. “BIS recognises that USD is the invoice currency of choice, particularly in sectors like oil and petroleum. A cross-border payment from London ultimately has to pass through New York in terms of clearing, so it is logical to hold an account in New York for that purpose. Any other structure adds duality of cost and processing,” says Mr Wrest. He adds that ultimately, advancing technology “can and will challenge the genuine cross-border payments traffic seen today: and the need for intermediary banks, additional cost and lack of transparency of information will pass through with the payment itself”. ■
Mar/Apr 2020
Insight
Todd Clyde Chief Executive Officer, Token
“Token is getting EMIs up and running with A2A payments in a matter of days, via a single integration to its market platform.”
F
or some time, Electronic Money Institutions (EMIs) have been rewriting the consumer finance rulebook. Innovative services based on eWallets and prepaid cards are commonplace and support a wide variety of use-cases, from state pension and benefit payments, to payroll, cross-border money transfers, FX and loyalty schemes. Through Open Banking APIs, however, a new market for innovative third-party financial services is evolving and it’s open to everyone - banks included. Is this an opportunity for EMIs, or does it threaten their place at the cutting edge? Making a business out of staying ahead of banks is a delicate balancing act. Compared to most banks, the majority of EMIs are modestly resourced and must sprint to develop the services that keep them popular and front-of-mind. Consumers want an increasingly frictionless UX and smarter, more personalised in-app services. Investors want returns. Merchants want lower acceptance fees and to boost conversions, and everyone wants better security and fraud protection, together with quicker, faster and cheaper payments. For EMIs, time-to-revenue is critical, and, in this multi-stakeholder world, the pressure is on to call the right shots first time. Can Open Banking help? You bet. While it’s true that over time API connectivity will enable banks to offer EMI-like services, like most things with banks, that’s going to take some time. In the interim, agile EMIs can use Open Banking to evolve their services and shore up their businesses at the same time. With research from Juniper suggesting that nearly 50%
of the world’s population will be using some kind of digital wallet facility by 2024, the near-term market opportunity for EMIs is very real indeed. A strategic outlook will pay dividends. Particularly now, considering that a high proportion of EMIs remain either unaware of their obligations under PSD2 or focused on integrating basic compliance APIs. EMIs that take longer-term positions and harness the right blend of market connectivity and developer support have a great opportunity to take charge of the sector and the next generation of digital financial services. How? By looking beyond compliance and leveraging APIs to cut costs, enhance their customer UX and enable the development and introduction of new services quickly and at scale. Account-to-account (A2A) payments is a convincing first step. This service alone stands to change the wallet-load game for good, eradicating card scheme, processor and interchange fees and replacing them with one vastly reduced transaction fee. Funds also clear almost instantly, enabling a new last-minute-load experience for users. The real potential for EMIs, however, lies beyond faster and cheaper. By leveraging Open Banking, EMIs can tap into a new age of hyperconnectivity to third parties. EMIs can also connect to a ready-to-go ecosystem of merchants, banks and other service providers, and work these connections to create new data and payment-based services uninhibited by national borders and old-world networks. Token’s market platform, for example, already has full bank coverage across Europe (defined as 90% of all accounts), via API-based connections
to thousands of banks. Token is getting EMIs up and running with A2A payments in a matter of days, via a single integration to its market platform. We’re enabling EMIs to offer both open payment and data services to customers directly, from within their apps and under their own brand, transforming the UX and increasing conversions as a result. Digital wallet loading occurs without the customer leaving the wallet environment, and without the need to upload and maintain their card details. Instead, the user associates and verifies their bank account once, and they’re done. Across Europe, Token is helping all types of business stay ahead of changing market dynamics and evolving customer expectations. We are providing EMIs with a new playground for innovation, connecting banks, merchants and third-party providers to enable wallet loading, eCommerce payment, account aggregation and a host of other digital payment and data services. Is Open Banking a threat to EMIs? Well, that’s a matter of perspective. It wasn’t long ago that banks viewed Open Banking simply as a PSD2 compliance exercise. Only recently have these tankers started to turn and refocus on developing commercialisation strategies. EMIs, on the other hand, have agility and innovation woven into their DNA. With the right start they can mobilise quickly to deliver tangible value to their customers. Having carved out their niche by moving faster than the competition, there is every reason to earmark EMIs as early champions in banking’s new digital age. ■ 35
GLOBAL SPOTLIGHT
Open Finance across the globe A COVID-19 lesson Carlos Figueredo Chief Executive Officer, Open Vector
C
OVID-19 is showing us not only how fragile we are as a race but also how dependant we are on technology. A simple example of this are most, if not all, supermarket delivery sites are either down or unable to cope with demand. Online buying through Amazon and other retailers are in such demand that they are hiring in the hundreds of thousands. Netflix, Amazon Prime, and other streaming sites are lowering their quality just for the Internet to cope. But most importantly, people are very much looking for information and for financial assistance through these difficult times. This virus has placed millions of people in financial duress in just a matter of weeks. While governments are offering various financial assistance for employees, employers and self-employed, the question is where to find the information and where to access the funds from. People need to dynamically understand what money they have and where. What debtors will be coming next seeking payments and what can they do to stop them or pause them? This is where Open Finance may have been able to play a key role. During these challenging times, and assuming that Open Finance would have been in place, people may have been able to access single point apps that would have quickly given an individual a snapshot of their finances. Coupled with AI, Open Finance may have allowed for the individual to see which debtors would be debiting an account and when but also what assistance could counter that particular debt. Also, now that medical insurance is more relevant than ever, especially in jurisdictions with no universal health care, Open Insurance would have allowed for more consumers to have information of insurance features in one application, giving them the opportunity to access those that 36 O P E N B A N K I N G E X P O . C O M
would better meet their needs and budgets. Most importantly, Open Finance may have been able to find loans and grants for individuals and businesses based on “approved” circumstances facilitating and efficiently serving consumers. Cross sectors may have used Open Finance to offer lending and payment deferments directly to consumers and businesses and not where it’s the consumer having to go and seek for the loans. This would have been achieved by understanding consumers and businesses through the shared data they would have had and through established consent mechanisms. Today, there is a wait time of over one hour to speak to an agent at a bank to assist with loans, products, overdrafts, etc. Open Finance would have alleviated this through data driven AI solutions where products and services would have been directly made available to consumers. Open Finance may also have played a key role to the unbanked. Those individuals may have been able to use minimal services. Some of these may have been for the use of online payments for electricity in poor areas of Africa, which is highly cash dependant and people buy electricity a couple of hours a day at a time in person. These online mechanisms would have reduced exposure to the virus. Today, in some countries, bank branches will need to remain open because P2P real-time payments are
not available, causing individuals to be exposed. Open Finance may have allowed for consumers to know which merchants were selling specific products but even more than that, smart refrigerators or medicine cabinets may have highlighted someone being low on a specific product and where they can or can’t get it, producing efficiency in someone knowing exactly where to go instead of having to run around to two or three stores. Efficiency may have also been found in people having lost their jobs where Open Finance may have helped to redirect people to other opportunities based on HR and recruitment consent mechanisms. Not to mention logistics of products and services and how we may have found efficiencies in distribution channels. In summary, innovation continues to change our lives and will only evolve further and faster. What Open Banking, Open Finance and Open Data aim to achieve is consumerbased efficiency and remove itself more and more from corporate driven dependencies. Among the many things this virus is showing us, we are definitely seeing how current innovation has been helpful, but how we still have so much more room to truly take advantage of consumer-based data and the products and services we could access that would further provide efficiency and improve people’s lives. ■
➽ If you would like to comment on this opinion piece, please email us at: editorial@openbankingexpo.com
Open Vector helps industries and individual firms undertake API strategies. Mar/Apr 2020
It’s called Open Banking, but don’t underestimate its security
SME FOCUS
Simon Cureton Chief Executive Officer, Funding Options
J
ust a few short months ago and it would have been inconceivable that this mysterious coronavirus would impact the world so drastically. But here I am, working from my home office rather than at Funding Options’ London HQ. UK plc is experiencing an unprecedented time that will unquestionably go down in history. Companies, large and small, are navigating the choppiest of waters at present as a result of Covid-19. As a nation, we’ve personally sought to safeguard our loved ones and take sensible measures to self-isolate and avoid spreading the coronavirus. As leaders, the responsibility is no less serious as we look to protect our businesses, customers and staff. Indeed, our employees are who make operating at this time possible. But the fact of the matter is that, despite our best efforts to keep supporting independent businesses and meeting their needs during this challenging period, we’ve had our hands tied. In the current climate, British businesses don’t require funding for working capital next week, in a fortnight or next month, they need it yesterday to meet the evolving challenges being posed by Covid-19. Unfortunately, that’s not been the case with the existing Coronavirus Business Interruption Loan Scheme (CBILS), despite Rishi Sunak’s best efforts. In the first instance, alternative finance providers were side-lined and left spectating as traditional high street banks were allocated the power to dispense government funds. The lending sector is facing a harsh drought due to extraordinary demand. We alone had more than 10,000 businesses request loans worth £1,015,843,585 throughout March. These are all applications that sat outside of the CBILS. It is time all firms are met with an exceptional response. Of course, nobody could have foreseen this coming but there is a tool at the disposal of the government, which
isn’t being championed – Open Banking. With Open Banking, you have a rich fintech solution that’s been available for a couple of years and yet many SMEs haven’t been made aware of its capabilities. But there’s usually a misconception that data security is lax, which is why adoption isn’t where the sector would have predicted. Although the term “Open Banking” may sound somewhat juxtaposed with the security-centric nature of finances, this isn’t the case. The notion that the use of Open Banking will make companies more likely to fall victim to breaches is nothing more than myth. The truth of the matter is that Open Banking can present SMEs with a greater selection of options for their finances. They won’t have to rely solely on conventional banks, which has traditionally been the case, they’ll have a wider array of service providers to access – all of which are regulated by the Financial Conduct Authority. As such, any sharing of data is entirely the choice of the business in question, and the exchange is done securely through APIs, preventing any leaks or foul play. In the same way SMEs are being given more choice through Open Banking, they also receive greater flexibility. So just because they’ve chosen to share data, that doesn’t mean they’ll lose control of it for years to come – it’s simply a matter of contacting the service provider
or their bank and rescinding the consent. Aside from the ability to give third parties visibility of financial data, Open Banking is also powerful for internal company usage too. Indeed, SMEs will benefit from more transparent viewing of their finances using the technology, supporting everything from budgeting to cashflow and beyond. As someone who has worked with legacy banks and now helming a fintech, I’ve long recognised the value of Open Banking. It’s a marketplace evolution that has been sorely needed to level the playing field for SMEs and alternative finance providers alike. We know that time is, quite literally, money – especially in these business conditions. Based on that, our own application of Open Banking at Funding Options has sped up the loan application process for SMEs, so that submissions will take a matter of minutes. This is opposed to the more commonplace days or hours they’re typically required to wait. These are unique times, so it’s time for SMEs to take a unique approach. The journey to make Open Banking the norm won’t happen overnight. And as an industry, we have to work harder to get the word of the technology and its benefits out there to SMEs – not just now, but when his period has passed. The potential of Open Banking is huge, so it’s essential that everyone knows it. ■
➽ If you would like to comment on this opinion piece, please email us at: editorial@openbankingexpo.com
Funding Options is an online marketplace for business finance across Europe. 37
Hub
The Open Banking & PSD2 Hub Global industry expertise facilitating the Open Banking ecosystem
richard.meirion-williams Email: @bjss.com Company: BJSS
Telephone: +44 7894 230895
Contact: Dennis Collet
Website: bjss.com
BJSS, the UK’s leading privately-owned IT and business consultancy. Winner of a Queen’s Award for Enterprise, we work with major organisations, delivering IT solutions that millions of people use every day. With over 25 years’ experience, BJSS offers deep insight and experience of the technical, business and operational challenges facing banks. We’re a strategic delivery partner for many retail and investment banks, financial institutions and fintechs thanks to our comprehensive portfolio of services and absolute focus on outcomes. Whether working as a sole supplier, or collaborating in mixed client and vendor teams, our flexibility and commitment to technical excellence mean we succeed where others fail to deliver.
Email: marketing@cashfac.com Company: Cashfac
Telephone: +44 207 920 0617
Contact: Graeme McKee
Website: cashfac.com
Cashfac is a leading provider of operational cash management software, including the world’s most deployed virtual account driven solution. Delivered through their global bank partners and direct-to-customer, Cashfac helps hundreds of organisations improve the productivity, visibility, automation and regulatory compliance of their cash management operations. Cashfac is a regulated provider of Open Banking and PSD2 services, authorised by the Financial Conduct Authority as both an Account Information Service (AISP) and Payment Initiation Service Provider (PISP). Cashfac is enabled by its PSD2 connectivity to bring solutions to market in aggressive timescales for customer consumption.
Email: dh@coff.uk Company: CASHOFF
Telephone: +44 7908 704051
Contact: Darren Hughes
Website: coff.uk
CASHOFF provide open banking API solutions to get help banks increasing the activity of customers in their mobile apps and e-banking systems. This approach increases transactions, improves customer loyalty and provides cross selling opportunities via new revenue streams. CASHOFF’s unique cashback reward program is based upon your customers spending behaviours, their favourite brands and highly targeted to each individual customer. This increases banking transactions and customer retention, improves customer satisfaction, whilst also generating additional revenue for the bank. CASHOFF named as a top 10 Fintech company by Deloitte, have already successfully helped more than 40 banks internationally, isn’t it time we help you.
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Retail Banking
AI & ML
API Development
Virtual Account Management (VAM) software Solutions enabled by Open Banking and PSD2 connectivity
FCA authorised as an AISP and PISP
Data import for multi-banking
Data analysis for personal financial management reporting
Tailored cashback offers
Mar/Apr 2020
Hub
Want to see your company listed here? Contact Adam at adam.cox@openbankingexpo.com or call +44 20 7993 5159
Email: newmembers@cifas.org.uk Company: Cifas
Telephone: +44 20 3004 3600
Contact: Lee D’Arcy
Website: cifas.org.uk
Cifas is the UK’s leading fraud prevention service and has been for over 30 years. Through Cifas, over 500 member organisations from across the sectors share data and intelligence to protect their business, employees and customers from fraud and financial crime. Our method of collaboration and cooperation, bringing together sectors and organisations, is the most effective way to tackle financial crime. In short – fraudsters don’t discriminate, so neither should we. And as a not-for-profit member organisation, all our income is reinvested into creating new technology and innovations: continually improving your ability to detect, deter and prevent fraud and financial crime.
richard.johnson Email: @computershare.co.uk Company: Computershare
Telephone: +44 7711 856483
Contact: Richard Johnson
Website: computershare.com/uk
Computershare Loan Services (CLS) is a leading international third-party mortgage service provider. We currently administer around £100 billion of assets globally and support hundreds of thousands of customers throughout the lifecycle of their loans. We apply our expertise, experience and advanced technology to provide insight and a variety of mortgage services, including loan administration and the management of large volumes of complex data, to help mortgage lenders and investors optimise the performance of their portfolios within a highly regulated environment.
calum.stephens@ Email: emergingpayments.org Company: EPA
Telephone: +44 20 7378 9890
Contact: Calum Stephens
Website: emergingpayments.org
The EPA connects the payments ecosystem, encourages innovation and drives profitable business growth for payments companies. Its goals are to strengthen and expand the payments industry to the benefit of all stakeholders by delivering a comprehensive programme of activities which addresses key issues impacting the industry including: A programme of 70 events annually, Annual Black-Tie award ceremony, Leading industry change projects, Lobbying activities Training and development, Research, reports and white papers. The EPA has over 130 members from across the payments value chain; including payments schemes, banks and issuers, PSPs, and more.
Fraud prevention
Data sharing
Financial crime
Mortgage Servicing
Market-leading Analytics
Optimise Portfolios
Payments industry
FinTech events
FinTech community
39
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The Open Banking & PSD2 Hub Global industry expertise facilitating the Open Banking ecosystem
Email: yassir.jiwan@equifax.com Company: Equifax Canada
Telephone: +1-416-886-1722
Contact: Yassir Jiwan
Website: consumer.equifax.ca/business/
Equifax is a global data, analytics, and technology company and believes knowledge drives progress. The company blends unique data, analytics, and technology with a passion for serving customers globally, to create insights that power decisions to move people forward. Headquartered in Atlanta, Equifax operates or has investments in 24 countries in North America, Central and South America, Europe and the Asia Pacific region. It is a member of Standard & Poor’s (S&P) 500® Index, and its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. Equifax employs approximately 11,000 employees worldwide. For more information, visit Equifax.com and follow the company’s news on Twitter and LinkedIn.
Email: robert.mckechnie@equifax.com Company: Equifax UK
Telephone: +44 0113 8343133
Contact: Robert McKechnie
Website: equifax.co.uk
Equifax is a global information solutions company that uses trusted unique data, innovative analytics, technology and industry expertise to power organisations and individuals around the world by transforming knowledge into insights that help make more informed business and personal decisions. We believe in the power of partnerships, to help our clients use Open Banking to provide better experiences and better products for their customers. By combining our data assets, analytical expertise and innovative digital technologies, our partnership with Account Score and their AISP consents.online delivers real-time, end-to-end Open Banking solutions to enhance customer on-boarding processes and drive growth through better decisioning.
Transaction categorization & analytics (CAN and UK) Improved online customer journeys (CAN and UK) New capabilities and services to provide a competitive edge in the market
Open Banking as a Service (OBaaS)
Transaction categorisation & analytics
Improved online customer journeys
Email: eleni.coldrey@eu.equinix.com Company: Equinix
Telephone: +44 1753 828862
Contact: Eleni Coldrey
Website: equinix.co.uk
Equinix deliver cloud-based financial services accessible to users anytime, anywhere. Prepare for Open Banking transformation with Equinix Cloud Exchange Fabric™ to reach your customers, interconnect to cloud and payment partners, and integrate payment networks and regulations. Equinix connects the world’s leading businesses to their customers, employees and partners inside the most-interconnected data centres. On this global platform for digital business, companies come together across more than 50 markets on five continents to reach everywhere, interconnect everyone and integrate everything they need to create their digital futures.
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Secure API Connection
Cloud Exchange
Interconnection
Mar/Apr 2020
Hub
Want to see your company listed here? Contact Adam at adam.cox@openbankingexpo.com or call +44 20 7993 5159
Email: aurelie.dousset@experian.com Company: Experian
Telephone: +31 70 440 4000
Contact: Aurelie Dousset
Website: experian.nl
Experian is the world’s leading global information services company. During life’s big moments – from buying a home or a car, to sending a child to college, to growing a business by connecting with new customers – we empower consumers and our clients to manage their data with confidence. We help individuals to take financial control and access financial services, businesses to make smarter decisions and thrive, lenders to lend more responsibly, and organisations to prevent identity fraud and crime. We have 16,500 people operating across 39 countries and every day we’re investing in new technologies, talented people and innovation to help all our clients maximise every opportunity. We are listed on the London Stock Exchange (EXPN) and are a constituent of the FTSE 100 Index.
Email: info@fintechnorth.co.uk Company: FinTech North
Telephone: +44 113 834 3133
Contact: Joe Roche
Website: fintechnorth.uk
FinTech North is an events-based initiative operating in the north. Founded in Leeds in 2016 by Whitecap Consulting and White Label Crowdfunding, it has now expanded into a series of conferences and events across multiple locations. FinTech North has hosted over 45 events attracting over 5000 delegate registrations from over 800 different companies, with speakers drawn from 22 countries. Open Banking is a central theme of many of the events.
Email: mediarelations@fiorano.com Company: Fiorano Software
Telephone: +1 650 326 1136
Contact: Sumit Kuhite
Website: fiorano.com
Founded in 1995 in Silicon Valley, California, Fiorano Software provides API-led hybrid integration technology enabling interoperability, agility, profitability and new revenue streams. Fiorano has been at the forefront in transforming enterprise backbone infrastructure wherein businesses can implement a dynamic strategy to tackle challenges arising from digital transformation projects involving cloud and APIs. Fiorano delivers banking industry-specific solutions, including Core Banking Integration, PSD2 Accelerator and Open Banking Platform to comply with regulations, dynamically deliver assets and build capabilities for better customer engagement. Fiorano operates worldwide with partners across the globe.
End to end open banking capabilities on demand Granular insights with cross border categorization as-a-service Next generation of credit and affordability to fuel frictionless digital journeys
Regional FinTech
FinTech events
FinTech community
PSD2 Accelerator
Open Banking Platform
API Management
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The Open Banking & PSD2 Hub Global industry expertise facilitating the Open Banking ecosystem
Email: keith.hale@gdslink.com Company: GDS Link
Telephone: +44 3303 115116
Contact: Keith Hale
Website: gdslink.com
GDS Link is a global provider of credit risk management solutions. Our decision engine allows credit risk teams to simulate, test and deploy models, rules, strategies and policies quickly and accurately. This is backed by our data engine which incorporates connections to all major sources of data in the UK, allowing aggregation of credit and Open Banking data to be used for expenditure classification, customer identity and verification, and affordability. Our case management solution case centre uses a browser front-end backed by a NoSQL database to allow for rapid processing where manual intervention is required.
Company: Konsentus
Email: enquiry@konsentus.com
Contact: Brendan Jones
Website: konsentus.com
Konsentus provides Third Party Provider (TPPs) identity & regulatory checking ensuring financial institutions (FIs) are PSD2 Open Banking compliant. Delivered through a SaaS-based solution using restful APIs with no set-up fee Konsentus operates across all 31 National Competent Authorities and works with the EBA TPP Register and 70+ QTSPs to ensure FIs never provide data to unregulated TPPs. Working both through partners including Mastercard, or providing services directly, Konsentus is the leading SaaS based TPP identity and regulatory checking solution in Europe.
Company: Modulr
Email: cerys.thompson @modulrfinance.com
Contact: Cerys Thompson
Website: modulrfinance.com
Modulr is the new integrated payment service for businesses that need a faster, easier and more reliable way to move money. Modulr’s API and platform delivers automated pay outs, simplified pay ins and the ability to launch new payment services for clients and software partners within employment services, lending, fintech, travel and more.
Credit Risk
Decision Engine
Open Banking
PSD2 Open Banking Compliance
SaaS based, plug and play TPP identity & regulatory checking TPP identity & regulatory checking for ASPSPS
Automate pay out
Simplify pay in
Deliver new services
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Mar/Apr 2020
Want to see your company listed here? Contact Adam at adam.cox@openbankingexpo.com or call +44 20 7993 5159
Email: presse@ndgit.com Company: NDGIT
Telephone: +49 8912 5015560
Contact: Oliver Dlugosch
Website: ndgit.com
For those wanting to stay at the forefront of financial services, NDGIT is engineering the backbone for connected banking and insurance that drives the transformation of everyday banking. Our API platform enables banks to open up to digital partners using Open Banking APIs and PSD2 solutions to deliver, consume, or control microservices. In 2017, NDGIT implemented Switzerland’s first open banking platform and was awarded the Euro Finance Tech Award 2017 for the best cooperation between bank and fintech, and the 2019 Finance IT Innovation Award. In 2018, the NDGIT API platform won the CEE Fintech Challenge, the largest FinTech competition in Central and Eastern Europe.
Email: megan.harrison@openwrks.com Company: OpenWrks
Telephone: +44 07984 661032
Contact: Megan Harrison
Website: openwrks.com
OpenWrks make Open Banking work. Our mission is to help everyone understand what they can afford to invest, save, borrow and repay. Using Open Banking, we make it easy for people to securely share their financial information with companies they trust, so those companies can provide better, more personalised products, support and advice. We reduce costs for our clients by automating affordability assessments as well as increasing revenues by helping them provide the right financial products and advice, at the right time, for their customers.
Email: sales@pingidentity.com Company: Ping Identity
Telephone: +44 207 190 9105
Open Banking Platform
World leading technology provider for bank’s connection
Trusted by 30 well-known banks
Income and Expenditure
Transaction categorisation
API
Secure access to accounts (XS2A)
Website: pingidentity.com Ping Identity is pioneering Intelligent Identity. The Ping Intelligent Identity platform provides customers, employees, partners and, increasingly, IoT, with access to cloud, mobile, SaaS and on-premises applications and APIs, while also managing identity and profile data at scale. Over half of the Fortune 100 choose us for our identity expertise, open standards leadership, and partnership with companies including Microsoft and Amazon. We provide flexible options to extend hybrid IT environments and accelerate digital business initiatives with multi-factor authentication, single sign-on, access management, intelligent API security, directory and data governance capabilities.
Strong customer authentication (SCA)
Consent management
43
Hub
The Open Banking & PSD2 Hub Global industry expertise facilitating the Open Banking ecosystem
Company: Plaid
Email: europe@plaid.com
Contact: Keith Grose
Website: plaid.com
Plaid is a technology platform and data network that enables applications to connect with users’ financial accounts. We focus on lowering the barriers to entry in financial services by making it easier and safer to use financial data. Today, we support developers across Europe and North America.
API
PSD2 compliance
API Transaction categorization
Company: reflow
Email: hello@reflow.zone
Instant Payments
Website: reflow.zone reflow provides services to merchants and customers in the EEA. It is licensed by the Financial Conduct Authority of the UK as a regulated Authorised Payment Institution. Breaking down barriers to simplify payments by creating exceptional experiences. Enabling new financial experiences for everyone, that is improving the way buyers and sellers exchange money and data. At the forefront of PSD2 and Open Banking, reflow offers instant payments removing the need to enter long card numbers and the fear of getting card details stolen or hacked. With no new logins or passwords, the customer approves the payment by using Touch ID or Fingerprint on their banking mobile app or their online banking password.
Email: marketing@theslideapp.com Company: Slide
Telephone: +44 207 920 0617
Contact: Graeme McKee
Website: theslideapp.com
Slide is a new banking app for iPad and iPhone with built-in cash flow forecasting, built to help small businesses manage what has happened and what will happen to their future company cash. Free to download from the App Store, Slide offers these businesses a view of yesterday, today and tomorrow within one app, giving them control over their future bank balance. With Slide there are No More Guesses. Slide is a product of Cashfac PLC - a regulated provider of Open Banking and PSD2 services. For more information visit www.theslideapp.com or download Slide for free on the App Store (search ‘The Slide App’).
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Data Insights
Request to Pay
Open Banking and cash management app
Built-in cash flow forecasting capability included Free to download on iPad and iPhone from the App Store
Mar/Apr 2020
Want to see your company listed here? Contact Adam at adam.cox@openbankingexpo.com or call +44 20 7993 5159
Email: molly.rosedale@token.io Company: Token Inc.
Telephone: +44 7554 663340
Contact: Molly Rosedale
Website: token.io
Token’s universal Open Banking platform, TokenOSTM, allows banks and third parties to interact in a digital global financial services ecosystem. Token’s turnkey service helps banks comply with PSD2 in less than 90 days and launch new Open Banking propositions. Third parties, such as payment processors, merchants and developers, have access to account data and payment initiation at over 4,000 European banks through a single API, and the tools to deliver best-in-class use cases. Token.io is authorised as an AISP and as a PISP by the FCA in the UK and has passporting rights in an additional 20 countries.
Email: david.firth@transunion.co.uk Company: TransUnion
Telephone: +44 7802 799501
Contact: David Firth
Website: transunion.co.uk
TransUnion is a leading global risk and information solutions provider to businesses and consumers. The company provides consumer reports, risk scores, analytical services and decisioning capabilities to businesses. Businesses embed its solutions into their process workflows to acquire new customers, assess consumer ability to pay for services, identify cross-selling opportunities, measure and manage debt portfolio risk, collect debt, verify consumer identities and investigate potential fraud. Consumers use its solutions to view their credit profiles and access analytical tools that help them understand and manage their personal information and take precautions against identity theft.
COMMERCIAL CLARITY
TM
Email: info@whitecapconsulting.co.uk
Company: Whitecap Consulting
Telephone: +44 113 834 3133
Contact: Julian Wells
Website: whitecapconsulting.co.uk
Whitecap Consulting is a strategy consultancy based in Leeds, Manchester, Milton Keynes, Bristol and Newcastle. It is particularly active in the digital, technology and FinTech sectors, with Open Banking and PSD2 being a common theme across many projects. Whitecap’s clients have included banks, building societies, technology providers, outsourced service providers, FinTechs, retailers, universities.
Frictionless bank direct payment
PSD2 compliance
End-to-end security
Easy-to-integrate end-to-end Open Banking solution
Granular categorisation and insight engine
Purpose-built solution for affordability and creditworthiness
FinTech strategy consulting
Open Banking opportunity mapping
FinTech partnership strategy
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The Open Banking & PSD2 Hub Global industry expertise facilitating the Open Banking ecosystem
Email: jade.thomas@yapily.com Company: Yapily
Telephone: +44 7531 645112
Contact: Jade Thomas
Website: yapily.com
Yapily is an enterprise connectivity company, specialising in open data technology. Founded in 2017. Yapily provides an Open Banking API to simplify connectivity and power the most demanding applications. By equipping every developer with a valuable toolkit, Yapily empowers users to build, connect and monitor their own API’s. Yapily is the only technology provider to join the Technical Design Authority (TDA) with the Open Banking Implementation Entity (OBIE).
Company: Yolt Technology Services
Email: bas@yolt.com
Contact: Bas van Marissing
Website: yts.yolt.com
YTS (Yolt Technology Services) is the leading Open Banking provider in Europe, building, managing, and maintaining AIS and PIS connections for top financial institutions and ambitious tech businesses. Built on the promise of Open Banking and PSD2, YTS is on a mission to innovate and drive the financial industry forward. From early on, YTS worked closely with the Open Banking Implementation Entity, other TPPs, and financial institutions to shape and launch Open Banking. YTS was the first ever TTP to successfully make an Open Banking API call. Just over two years later, YTS have now made over 240 million, accounting for 50% of all traffic.
API for Key Performance Metrics
API for Enriched Customer Experience
API for Secure, Low-Cost Payments
Account information services
Payment initiation
Data enrichment
Want to see your company listed here? Contact Adam at adam.cox@openbankingexpo.com or call +44 20 7993 5159 46 O P E N B A N K I N G E X P O . C O M
Mar/Apr 2020
THE LAST WORD
As the pandemic puts the pedal to the metal for Open Banking fintechs, is the market set to outpace regulators? Amy Kroviak Global Corporate Affairs Consultant, Co-founder, Open51
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e are currently navigating unchartered territory due to the Covid-19 pandemic. For many of us, technology is at the forefront of helping us manage this crisis and adapt to a virtual world of work – keeping us connected whilst on lockdown, but also driving greater efficiencies and opportunities to maintain ‘business as usual’. Perhaps surprisingly to some, in these early days of the pandemic Open Banking technology has quickly assumed an important role as an enabler of products and services that can help solve some of the challenges we now face. From personalised debt advice, fast access to finance for SMEs, and easy, secure ways to send digital payments, there are many existing Open Banking enabled products that can help consumers and SMEs during this period of uncertainty. And, just weeks into the crisis in the UK, several Open Banking fintechs have collaborated on new initiatives, products and services to support consumers and SMEs. Partnerships such as Covid Credit, established to help self-employed individuals access government support, and the formation of a fintech taskforce to help SMEs access funding during the crisis, demonstrate how agile and relevant the Open Banking sector is. As the saying goes, ‘technology waits for no one’ and the pandemic has not, as some have feared, slowed down the progress of Open Banking. Rather, it is providing opportunities to promote existing Open Banking enabled products and develop new ones that deliver value to millions. Post the pandemic, it is possible that there could be a significant increase in consumer adoption as a result. Of course, the pandemic will lead to changes in the fintech and wider financial services sectors that will impact Open Banking. In the short term, incumbent banks and large financial institutions will likely shift attention away from innovation to focus on required, core business needs. For Open Banking, much needed improvements to API performances could be delayed, for example, as well as the further development of payments functionality. In addition, the pandemic will likely impact smaller fintech start-ups more negatively than more established fintechs, reducing
the number of innovating firms in the sector. Investment also may become scarce, especially for firms with less flexible business models who are not able to adjust their costs or have less stable revenue streams. As unpleasant as some of these changes may be, they are hurdles to overcome rather than a derailment of Open Banking. It is important to remember that Open Banking is all about data which has a value for consumers, SMEs, the market and UK plc. In the recovery period and beyond, there will be a growing need for products and services powered by Open Banking technology. Consumers, as well as stakeholders including the Government, will value products that provide personalised solutions to long term challenges such as financial inclusion, for example, and broader access to finance for SMEs. Consequently, financial sectors eager for recovery - savings, mortgages, insurance, pensions – will hasten the development of Open Finance. Though the approach to Open Finance’s development may vary considerably from Open Banking’s. While the pandemic has injected further momentum in the commercial arena, with fintechs operating with a sense of urgency, seizing opportunities to expand and further develop the market, it appears to have had the opposite effect on the regulators. The FCA has delayed its Open Finance Consultation until 1 October, over six months from the original deadline. The CMA’s recent decision on the revised roadmap for Open Banking acknowledged that amendments were required, due to the pandemic’s “clear impact on timing”. We now await details of what will be delayed and for how long. We also await the Government’s plans for Smart Data following its consultation last summer. In the UK Open Banking was mandated by regulation that focused on improving the market for consumers; helping them make the most of their money. Consequently, Open Banking has been customer-centric in its design with open API standards and implementation guidelines to help ensure good customer experiences and outcomes. Things could be very different for Open Finance as the market overtakes regulators. But does it matter? At present, when we are all understandably focused on helping each other manage such an unprecedented crisis – perhaps not. However, post transition and recovery, it could be a different story. Without a strong regulatory foundation, commercial advantage will inevitably creep in. The customer centric approach of Open Banking will be eroded. When the regulations are clear that it is the consumer who owns their data, would this be acceptable and an appropriate foundation to develop Open Finance and the Open Data economy? ■ Open 51 is a newly formed network to address the gender imbalance in the fintech sector. 47