Open Banking Expo Magazine Issue 5 by Open Banking Expo

OPEN BANKING EXPO IDEAS, CONNECTIONS AND DEALS IN OPEN BANKING

Issue 5_Oct/Nov 2019 OPENBANKINGEXPO.COM

innovators, disruptors and visionaries Driving the Open Banking revolution Event preview inside PAGE

13 PAYMENTS Are SMEs being left behind in the payments sphere?

GLOBAL News and views from the Amsterdam and Toronto Expos

FINTECH SURVIVAL Fintechs fight to beat the competition

THE BIG INTERVIEW HSBC on retaining market share through digital innovation

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Editorial

PUBLISHER’S WELCOME

Kelly Stanley Publisher & Co-founder kelly.stanley@openbankingexpo.com

Across the North Sea, when asked how much impact Open Banking would have on the industry, 25 per cent of delegates at the Amsterdam event believed it would change everything.

Welcome to Issue 5, a very special one for us as it lands in time for the second Open Banking Expo. This year, we’ve added ‘London’ to the name of the event, as since its inaugural outing we have launched regional offerings in Europe and Canada. You can find out more about the events that took place in Amsterdam and Toronto on pages 37 and 29 respectively. Our friends across the Atlantic are “pumped” for Open Banking to officially become part of their financial ecosystem, though whether it is regulation-driven or market-driven is still up for debate. Whatever the key driver, the market was warned by Senators at the event that it would be a complex process, and that players should move swiftly and with urgency to unlock its potential so that Canada keeps pace with its global counterparts. Across the North Sea, when asked how much impact Open Banking would have on the industry, 25 per cent of delegates at the Amsterdam event believed it would change everything. No wonder, then, that we witnessed a cacophony of opinions, ideas, concerns, predictions and budding connections. Turning to this issue, the Big Interview (p10) with HSBC’s Josh Bottomley, who is the global head of digital for the bank’s Retail Banking & Wealth Management division, offers insight into HSBC’s belief that

AI will be essential in the future of Open Banking. It is gearing up to give the digital challengers a serious run for their money. Our latest View from the Top is from Poland (p9). Maciej Kostro, board advisor for the Polish Bank Association and leader at Polish API shines a light on the intricacies of why there is no uniform standard of access to payment accounts in Europe. The 2019 Innovation in Retail Banking Report, authored by financial strategist Jim Marous for Efma and Infosys Finacle, found only 26 per cent of global banks are evolving towards an Open Banking model or platform (p7). We are excited to welcome Jim as keynote speaker for Open Banking Expo London on 13 November. His promises to be an illuminating session. Turn to page 13 for the London event preview. It includes the full agenda, which spans five stages and includes the new Mortgages and Payments stages. With more than 70 speakers, from incumbents to challengers, consumer lenders to business lenders, regulators to charities, payments providers to mortgage lenders, the event will be a hotbed of ideas, connections and deals to drive your Open Banking strategy to the next level. Don’t miss it! Enjoy the issue.

Editorial

CONTENTS I s s ue 5 _ O ct/Nov 2 0 1 9

Regulars

Cover Story

06 News

13 LONDON EVENT PREVIEW

Cash injection propels Rho into business banking: Canadian senators urge speed; Global banks ‘dragging heels’ on implementation; Paysend launches currency service.

This month sees the second annual Open Banking Expo London event, bringing together the innovators, visionaries and disruptors driving the Open Banking revolution. With five stages, more than 70 speakers and over 400 attendees, the event promises to be packed with interest and debate. For the full schedule, turn to page 13

Insights 43 49

Features

Faith Reynolds Jim Wandsworth, Mastercard

29 Open Banking:

09 View from the Top

A Canadian Lens

Maciej Kostro: The Polish banking expert on differing European standards.

28 SME Focus

Myles Stephenson: Modulr’s CEO says SMEs ‘left behind’ on payments.

Senior representatives from Canadian institutions debated the drivers of Open Banking and their methods of implementation at last month’s Open Banking event in Toronto. We take a look at the news and views from the inaugural Canada event.

37 Europe and the Open

Banking phenomenon

The single biggest lever for achieving success in Open Banking will be in finding the use cases and experiences that add value for customers. That was the strong message from discussions at the Open Banking Expo Europe in Amsterdam last month.

50 Open Banking & PSD2 Hub Your directory of leading suppliers in the market.

58 The Last Word

Adedeji Olowe: Open Banking Nigeria’s trustee takes a ten-year perspective.

04 O P E N B A N K I N G E X P O . C O M

37 Oct/Nov 2019

Editorial

The Big Interview

10 Josh Bottomley HSBC Retail Banking & Wealth Management

One of the largest banks in the world, HSBC is proud of its record of digital innovation. But how will it protect its market share?

For us it’s a healthy mix of in-house development and partnerships with ﬁntechs and other organisations.

44 Failing fintechs:

Survival of the fittest

Hundreds of fintechs have arrived on the Open Banking scene in recent years, but history hasn’t been kind to them, with the vast majority destined to fail. How will they handle the challenges?

CO NTR I B U T O R S

Edit o ria l Joe McGrath Senior Reporter Geordie Clarke Reporter Jennifer Turton Reporter Ellie Duncan Reporter

Heather Greig-Smith Sub Editor editorial@openbankingexpo.com Pr od u c t ion & M a r k et in g

Commercial & Events Kelly Stanley Event Director kelly.stanley@openbankingexpo.com +44 207 993 5159

Christian Gilliham Art Director christian@cgcreate.co.uk

Adam Cox Director adam.cox@openbankingexpo.com +44 207 993 5159

Lauren Linfield Head of Marketing lauren.linfield@openbankingexpo.com

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 5_Oct/Nov 2019 OPENBANKINGEXPO.COM

innovators, disruptors and visionaries Driving the Open Banking revolution Event preview inside

PAGE

13 PAYMENTS Are SMEs being left behind in the payments sphere?

GLOBAL News and views from the Amsterdam and Toronto Expos

FINTECH SURVIVAL Fintechs fight to beat the competition

THE BIG INTERVIEW HSBC on retaining market share through digital innovation

News

T H E L AT E S T NEWS FROM THE OPEN BANKING ECO SYSTEM

Cash injection propels Rho into business banking

ho Technologies has launched a flagship banking platform for small businesses and start-ups following a cash injection of nearly $5m from investors. US-based Rho Business Banking will enable businesses to apply for a fullservice bank account in under three minutes. The initiative - launched earlier this year - is the brainchild of former hedge fund manager and Deutsche Bank alum Everett Cook and BritishCanadian entrepreneur Alex Wheldon - who helped build online fashion platform Lyst. The service, which is designed to accelerate high-growth start-ups, charges no transfer or wire fees, includes interest on both cash and treasury accounts and has no minimum balances. The platform’s API technology also provides workflow automation, allowing companies to connect to applications such as Slack, Quickbooks and Xero, plus nearly 250 others

upon request, as well as team accounts that enable collaboration across an organisation. In addition, Rho will offer up to $10m in Federal Deposit Insurance Corporation (FDIC) insurance, which safeguards the checking and savings accounts against the failure of banks, and 1.61 per cent annual percentage yield on cash management. The company also uses a same-day Automated Clearing House (ACH) service to enable faster payments. Rho’s platform launch comes as the company secures $4.9m in seed

From personal experience, we believe small business banking is laden with outdated incumbents and missing a modern customer-first experience. Alexa von Tobel, Founder, Inspired Capital

funding. The funding was led by New York-based venture capital firm Inspired Capital – founded by former Learnvest CEO Alexa von Tobel and ex-US secretary of commerce Penny Pritzker. “From personal experience, we believe small business banking is laden with outdated incumbents and missing a modern customer-first experience. This founding team is uniquely positioned to build a best-in-class solution for the next generation of founders, small business owners, and beyond,” said von Tobel. According to Cook, many of the large banks in the US are failing small companies by only offering a something-for-everyone type service. “It generally means small businesses and early-stage companies become an afterthought. For us, that’s our only customer and our sole focus,” he said. The company, headquartered in New York, is currently accepting limited clients before it rolls services out more broadly.

Senators urge Open Banking approach to ensure Canada keeps pace Canada should move away from large banks controlling data and encourage financial competition and innovation through Open Banking. That was the message at the Open Banking Expo held in Toronto last month. Senator Colin Deacon, who represents the province of Nova Scotia, said: “I’m an advocate of moving towards Open Banking. It’s got within it the changes to the regulatory framework that are needed. I think that will unlock tremendous opportunity and productivity in our economy”. He added: “We can’t be complacent; we have to take this very seriously. 06 O P E N B A N K I N G E X P O . C O M

It’s a very important moment. We’ve got to move swiftly and with urgency.” Meanwhile, Senator Howard Wetston of Ontario warned that introducing Open Banking in Canada will be a complex process and will require ‘regulation by design’ to be successful. “We have well over 30 regulators in the financial sector in insurance and securities and banking. There’s a lot to think about there,” he said. “It’s highly fragmented, it’s challenging, and there can be considerable delays in implementing policies. What we need in Canada is regulation by design.” Canada’s Senate Committee on

Banking, Trade and Commerce published an Open Banking report in June. While Senator Wetston was unsure whether the next Canadian government would adopt the recommendations outlined, he said any legislation introduced must deal with privacy, the sharing of information, and consumer protection. Senator Deacon added: “This is an area where there’s so much innovation potential, so much growth potential for our economy, but the cultural shift is going to be a big one for our banks. “It’s about allowing the market to open up. And I think that’s going to be very, very good for Canada and for Canadians.” Oct/Nov 2019

News

Global banks dragging heels on Open Banking Banks are displaying a worrying lack of commitment to driving forward their Open Banking plans, according to a report. The 2019 Innovation in Retail Banking Report, authored by financial strategist Jim Marous for Efma and Infosys Finacle, found only 26 per cent of global banks are evolving towards an Open Banking model or platform. The report includes interviews with more than 350 banks and credit unions. Over half of respondents (51 per cent) admitted to being ‘mainstream’ or lagging in innovation. While over three-quarters (77 per cent) of banks stated an intention to increase their level of investment in Open Banking APIs over the next two years - with the majority also planning to focus on co-innovation with fintech start-ups and technology firms - doubt remains over banks’ willingness to leverage this technology fully. Only 35 per cent stated their level of readiness for Open Banking APIs and advanced analytics was high or very high, while 34 per cent admitted it was low or very low. “Many financial institutions are somewhat overwhelmed by the prospects of delivering on the Open Banking promise. The paradox exists between the desire to deliver more integrated solutions while being transparent around the sharing of data between multiple organisations,” the report states. However, it also found that banks recognise the need to change

SOUND BITE Starling adds Nimbla to its growing marketplace for SME customers

their strategic priorities over the coming years as digital innovation continues to increase competition in the sector. When asked which digital technologies would have the greatest impact on banking in the near future, banks put mobile technologies at the top, followed by advanced analytics and Open Banking APIs. The desire to build greenfield digital banks was mentioned by 36 per cent of respondents. However, this strategy could hold organisations back. “We have recently seen the closing of some digital banking initiatives, such as Finn by [US bank] Chase, where the digital bank was never given the freedom to succeed away from the legacy organisation,” said the report. Marous added: “While progress has been made in the areas of digital transformation, progress is exceedingly slow. In fact, there are indications that many organisations are not fully understanding the scope of change required.”

QUOTE OF THE MONTH Open Banking brings opportunities to serve the customer in innovative and more intuitive ways. Josh Bottomley HSBC Head Banking & Wealth Management

Challenger bank Starling has partnered with InsurTech firm Nimbla to offer businesses protection against insolvent customers. As a result of the partnership, Starling business customers can now protect themselves from financial losses caused by bankrupt clients through Starling’s in-app Marketplace. Customers of both Nimbla and Starling will gain access to its free credit-checking tool, allowing them to assess the financial risk and insure invoices for up to 90 per cent of their value. Nimbla is the latest in a series of partnerships which make up Starling’s in-app marketplace, It uses Open Banking APIs to connect financial products and services. Anne Boden, founder and CEO of Starling Bank said: “We are building a new kind of business bank which goes the extra mile for customers and our Marketplace partners are an essential ingredient to this.”

Fintech Paysend launches next gen currency service UK fintech Paysend has launched a ‘next generation’ business payment service enabling corporates to open multicurrency accounts. Paysend Connect, powered by Open Banking software provider Crassula, will give companies access to integrated banking and payment services as well as enable businesses to provide fintech solutions to their customers. The platform allows firms to open multi-currency business accounts, make SEPA and SWIFT transfers – the two most common ways to transfer money

internationally – as well as process online payments and issue corporate MasterCards with no purchase fees. Financial institutions and payment service providers can also use Paysend Connect to launch further fintech services via the technology provided by Crassula. Founded in 2015, Crassula provides solutions for businesses to create financial products including online payments system, e-wallets, and cryptocurrency exchange products. Paysend said its new service will allow firms such as telecoms companies,

retailers, social networks and other businesses to embed white labelled fintech products, including payment accounts, to their platforms within days. “Paysend Connect removes the hassle and complexity for business owners wanting to open up a multi-currency business payment account,” said CEO Ronald Millar. “By supporting businesses to do this quickly and simply, we help them to focus on their commercial operations.” The launch follows Paysend’s announcement in September that it had hit the one million customer milestone.

News

Lack of trust threatens Australian adoption

Australia’s Opening Banking regime could face an uphill struggle as a survey reveals Australians don’t fully trust financial institutions to keep their money or data safe. Deloitte’s Open Banking survey, published in October, found that just 42 per cent of Australian consumers believe major banks will keep their money safe. The survey, of 2,007 retail banking customers in Australia, revealed similar concerns over data privacy and comes as Australia gears up to introduce Open Banking early next year. From February 2020, customers will be able to instruct their bank to share their account and transaction information with accredited third parties. While major banks, mutuals and superannuation funds enjoy the highest trust among consumers, the willingness to trust other financial organisations and third parties was less pronounced. Digital banks, despite being

regulated and supervised like other banks, were trusted by only 10 per cent, and distrusted by 29 per cent. Technology companies have the lowest net prudential trust score. They were trusted by only 9 per cent to keep their money safe, and distrusted by 32 per cent. The survey found that most consumers are satisfied with their current banking provider, with 76 per cent having the same banking relationship for the past five years. But, a fifth of respondents said they intend to change provider within the next 12 months, with the ability to consolidate finances, better customer service, and more convenient banking being the top reasons to switch. Robin Scarborough, Deloitte customer partner and a contributor to the report, warned that with Open Banking in Australia just around the corner, it is important for all organisations to change their focus from just complying with the Consumer Data Right legislation, to developing services that deliver value for customers. “There is a clear opportunity for banks to create the right experiences to meet customers’ needs. However, the lack of financial and data literacy in Australia is probably one of the key impediments to consumers realising benefits from Open Banking,” he said.

Transport industry to mimic Open Banking approach The transport industry has moved one step closer to launching its own Open Banking-style system for consumers. The Open Transport Initiative, a team of transport and technology specialists led by Glasgow-based digital consultancy firm Ideal Interface, has published a draft open standard to facilitate peer-to-peer transport account data sharing. The initiative, launched earlier this year, has quickly gathered interest from public transport authorities and operators across the UK and Europe. The group said it aims to do for the transport sector what Open Banking has done for the financial services sector. The draft standard incorporates an API document allowing the customer 08 O P E N B A N K I N G E X P O . C O M

to view all of their transportation, mobility and associated data in one place, rather than searching across numerous apps and websites to join-up the journey, ticket and discount data. The initiative, which has had wider input from rail, ferry, subway, bus and parking representatives, as well as academia, aims to introduce an approved standard as early as the end of this year. “This is the right time to put [our] draft standard out to review. For us, this is the next step in getting the Open Transport accepted as a ratified standard. This is an enabler for true mobility-as-aservice (MaaS) schemes,” said Hayden Sutherland, founder and director of Ideal Interface.

METRICS Open Banking Implementation Entity on how account providers (ASPSPs)* Open Banking APIs are performing with key performance metrics. Oct 19 *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.

FAST STATS

180

regulated providers oﬀering Open Banking services Source: Open Banking Implementation Entity

98.7% Average API availability

110.5m Successful API calls (actual)

1/3

Canadian 18-44 years olds happy to share their data with third parties Source: Accenture

820

MILLISECONDS

Average API response time

1.75% Failed API calls

98.25% Successful API calls

Oct/Nov 2019

VIEW FROM THE TOP

Standards in the Open Banking landscape Maciej Kostro Board Advisor, Polish Bank Association & Leader PolishAPI

or many reasons, we do not have a uniform standard of access to payment accounts in Europe. First of all, the regulator did not opt to define such a requirement either in the directive or in regulatory technical standards (RTS). On the contrary, certain RTS provisions force the creation of different interfaces for virtually every bank. The regulations did not even include a list of basic transaction data which must be provided by the ASPSP. European markets have different levels of digital maturity in banking. In some countries, access to mobile banking and the use of instant payments is standard, in others not. The awareness of digital security threats is also different, both among customers and organisations. Pressure from fintech companies also varies from country to country. In some countries, among them Poland, cooperation with third party providers (TPPs) has a long and rich history. Based on this history, the Polish payment community decided to establish a project for the common XS2A standard. The goal has been clearly defined: to find a solution satisfying both sides: ASPSPs and TPPs. At the beginning of 2017, a project group was formed, including banks, credit unions, non-banking payment institutions, industry organisations and infrastructure companies. The group has received the support of consulting companies, law firms, and IT experts. Its attention has been focused on security issues.

Pay-by-link payments were our main inspiration. These type of payments have been present in our market since 2002 and constitute over 60 per cent of all e-commerce payments, significantly exceeding the share of card payments. The process is based on redirection to the bank’s infrastructure to: authenticate the user, select the payment account from which the payment will be made and authorise the given transaction (almost the same process as in the case of the Payment Initiation Service). This process involves an intermediary, an integrator, responsible for integrating merchants with individual banks – almost all banks in Poland offer such a service. Payment is made immediately and the merchant receives immediate confirmation. From the customer’s perspective, this is a well-known, safe and simple process. With billions of processed transactions, practical knowledge came about during this process, including information on vulnerabilities and security threats. This led to proposals on security for the PolishAPI standard, distinguishing our standard from PSD2 or the Open Banking UK standard. These include: • Minimising the use of HTTP headers: all transaction data are contained in the body (payload) of the request

➽ If you would like to comment on this opinion piece, please email us at: editorial@openbankingexpo.com

• Lack of GET queries - a consequence of including all relevant data in the payload • Mandatory mutual authentication based on eIDAS QWAC certificate • Both request and response must be signed with eIDAS QSealC certificate • Extension of the ‘scope’ parameter of the OAuth protocol - the ‘scope_ details’ parameter contains all information necessary for proper interpretation of the permissions. We are aware that PolishAPI is not fully in line with the REST API or OAuth 2.0 standard. Nevertheless, we believe that the area of access to financial data should be treated in a slightly different way to other data. Especially if we are talking about data collected as part of the Account Information Service, including account data, balance and transaction history. An additional aspect that we must take into account is the use of banking authentication tools for public services in Poland and the recommendation of Polish financial supervision regarding the ban on sharing authentication tools with third parties. From the point of view of interface implementation, the fact that there is more than one standard in Europe does not seem to be a big problem. This situation also creates a market for hub solutions. In my opinion, this is how the Open Banking market in Europe will be shaped: it will be a market of several hubs offering access to banks with some value-added services. ■

Based on this history, the Polish payment community decided to establish a project for the common XS2A standard. 09

Up Close

THE BIG INTERVIEW Josh Bottomley HSBC Retail Banking & Wealth Management

Looking ahead One of the largest banks in the world, HSBC is proud of its record of digital innovation. But with challengers all around, how will it protect its market share? Joe McGrath reports

s one of the first big companies to implement Open Banking in the UK, HSBC understands the challenges and opportunities that exist in the market. With the banking giant undertaking further projects this year, Open Banking Expo Magazine spoke to Josh Bottomley, global head of digital at HSBC Retail Banking & Wealth Management, to discuss current trends in the sector and what needs to be done to drive innovation further. According to Bottomley, there has been a massive shift in how people want to carry out their banking activities, with 87 per cent of HSBC’s global retail transactions now done digitally. Customers expect digital banking to be as straightforward as other transactions, such as booking a taxi or ordering a takeaway. “Open Banking brings opportunities to serve the customer in innovative and more intuitive ways. For example, over the past few years we have been testing account aggregation, new money management tools and a marketplace,” he says.

HSBC, like many banks, has undertaken a branch closure project in recent years, but it has also recognised that the way we bank is changing. Instead, it sees that consumers increasingly want enhanced digital capabilities and Open Banking initiatives. One of the digital initiatives that made headlines more recently was elsewhere in the HSBC group in October, in wholly -owned brand First Direct. The retail division has reportedly been earmarked for a digital overhaul, to allow it to compete with the new wave of challenger banks such as Monzo and Starling Bank. Products set to be introduced by First Direct over the next year include an in-app marketplace and the use of artificial intelligence (AI) to make recommendations and automate activities, according to a Financial Times report. Bottomley believes AI will be essential in the future of Open Banking and will drive the monitoring of service quality and connectivity, as well as help manage fraud issues. “I would highlight the use of artificial intelligence and machine learning to make sense of data from many different

Great ideas can come from anywhere in the organisation, so the most important thing is developing an innovation mindset internally where employees feel empowered to imagine what a customer experience could look like in the future. They also need the understanding of how technology could be applied to that vision to make it become a reality. Josh Bottomley

10 O P E N B A N K I N G E X P O . C O M

sources to deliver a better customer experience and risk trade-off. We can use algorithms to identify customers and circumstances that may be susceptible to payment fraud and make real-time interventions,” he says. “Credit risk management and sales suitability become a continuous spectrum where it’s about using behaviours to predict what lending solution is useful at any given time, rather than just approving or declining an application.” Global ambitions HSBC isn’t limiting its Open Banking ambitions to the UK. The group’s many separate divisions around the world are all working on digital initiatives that aim to protect the business’s viability for the future. Last year, for instance, rumours began circulating that HSBC is building a separate stand-alone digital banking service for small business customers. Dubbed ‘Project Iceberg’, reports suggest the bank has teamed up with more than 100 fintech startups for the venture, in order to offer innovative services. Bottomley says the bank has an appetite to build new Open Banking services both organically as well as through partnerships with fintechs. “For us it’s a healthy mix of in-house development and partnerships with fintechs and other organisations. We sometimes invest in fintechs if we see a long-term strategic benefit for our customers and business. At the same time, we buy off-the-shelf technology products and integrate the tools into our own platforms.” Successful ventures One of its most successful organic ventures within the broader HSBC group is the Hong Kong-based payments app PayMe which launched in 2017 from scratch and now has over 1.6 million users, out of a Hong Kong population of 7.3 million. On the flip side, purchased ‘off-the-shelf’ Oct/Nov 2019

Up Close

products include a version of Blackrock’s Aladdin Wealth platform which helps investors understand hidden risks in their portfolio. This bolt-on saw HSBC become the first global bank to customise the benefits of an asset manager’s portfolio construction platform to private banking and high net worth retail customers, according to Bottomley. While acquisitions and partnerships are important, it is the sharing of ideas that is key to HSBC’s Open Banking strategy. The bank runs regular ‘hackathons’ which are open to different employees and disciplines across the organisation. In 2017, it launched DigitalDownload – an internal education website to support staff in building their knowledge of new technologies. “Great ideas can come from anywhere in the organisation, so the most important thing is developing an innovation mindset internally where employees feel empowered to imagine what a customer experience could look like in the future. “They also need the understanding of how technology could be applied to that vision to make it become a reality,” says Bottomley. Trading up Indeed, no one can accuse HSBC of not striving to be innovative. While Open Banking has favoured the retail banking space, last month the bank took its first step into trade finance Open Banking with its banking guarantee API. The API, being tested by ING and Standard Bank, lets partner financial institutions and their clients see the status of their bank guarantees in real time from their own platforms rather than relying on phone calls and emails for updates. The digital service, the first of several that HSBC is planning in the trade finance market, enables partner banks to issue local guarantees in markets where they don’t have a presence, saving customers the complicated task of › 11

Up Close

We’re now working to integrate the features from that trial into our own app, which among other things will allow customers to shop around for non-financial services products – such as energy providers to help them cut their monthly bills – a first for a UK bank. Josh Bottomley

› navigating different banks for every project. With HSBC handling around half a million bank guarantees a year, the company sees these APIs as fundamental to the future of trade finance and cross-border trade. The bank is also pioneering the use of blockchain in trade finance. Its ground-breaking Cargill LC transaction in 2018 saw HSBC and ING use a letter of credit (LC) company to reduce the transaction time from a standard 5-10 days, to just 24 hours. And just this month HSBC pioneered 12 O P E N B A N K I N G E X P O . C O M

Malaysia’s first blockchain trade transaction. Again, the exchange was completed in 24 hours, thanks to the digitisation of key trade documents which enabled end-to-end visibility for all parties. For Bottomley, market innovations occurring in places such as Asia are a good indicator of where the future of Open Banking is heading. “The country we look at very closely is China,” he says. “There is a different mindset to financial services and how it is instinctively embedded into people’s lives there. For example, consumers naturally use platforms such as WeChat

to run so much of their daily lives, as it offers huge choice, and is convenient and intuitive. It will be interesting to see whether an ecosystem like that could develop elsewhere in the world.” Founded in 2011, WeChat has over one billion active monthly users and is one of the world’s largest standalone mobile apps, enabling users to pay bills, book doctor appointments, file police reports, hail taxis, and access bank services. In terms of driving innovation, Bottomley believes it is crucial for the industry and regulators to create ‘safe spaces’ to test out new ideas with customers, pointing to the Financial Conduct Authority’s regulatory sandbox as an ideal example. The sandbox allows businesses to test products and services in a controlled environment, with real consumers. It was in this sandbox that First Direct, in collaboration with fintech start-up Bud, tested its money management app Artha (see OBE Magazine, issue 1), which helps customers understand their spending from different providers through a single login. “We’re now working to integrate the features from that trial into our own app, which among other things will allow customers to shop around for non-financial services products – such as energy providers to help them cut their monthly bills – a first for a UK bank,” Bottomley explains. Innovation also means not being afraid to admit when things are not working. For HSBC, the decision to pull the plug on an idea before it’s too late is made easier by its tollgate approach to projects. The approach means teams aren’t permitted to advance to the next phase of a project before they meet a set of pre-determined criteria. “[This approach] makes it easier to assess whether we are on track and to course-correct when needed. Increasingly our projects make it through those gates with flying colours. When they don’t, we have a discussion as to the reason and we will act to get them back on track,” Bottomley says. “Occasionally we decide that inaccurate original assumptions, or changed conditions mean that we need to stop the project and, in those situations, we will run a review to make sure that lessons are learnt for the future.” ■ Oct/Nov 2019

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Make Open Banking work So everybody knows what they can aďŹ&#x20AC;ord to invest, save, borrow or repay.

OPEN BANKING EXPO LONDON

HEADLINE SPONSOR:

B E S O C I A L ! T W E E T # O B E E X P O & FO L LOW @ O P E N B A N K I N G E X P O

Welcome At the inaugural Open Banking Expo in November 2018, our keynote speaker – Dan Cobley, former MD of Google UK – said: “Open Banking is on the ‘S curve’ of innovation. At first adoption is slow. Then it either accelerates fast or fails to take off.” So… where are we now, 12 months later? According to the Open Banking Implementation Entity’s statistics, during the month of November 2018 there were 17.5 million successful API calls made by third parties. Fast forward to August 2018 (the latest data we have as we go to press), and that figure has exploded to 110.5 million. But we still have a long way to go to reach the success other financial technological advances – such as comparison sites, direct debits, and contactless payments – have achieved in terms of consumers and businesses embracing them. Today promises to be packed with interest and debate. We have been building the agenda since we closed the doors on the event last year and this year, we are delighted to offer you five stages of content! There are so many topics to discuss, successes to share, partnerships to explore and insights to reveal, we had to shoehorn it all in somehow! As part of a stellar line up, we are thrilled to welcome one of the world’s Top Five fintech influencers, Jim Marous. With more than 83,000 twitter followers, Jim has been featured on CNBC, CNN, The Wall Street Journal, New York Times, The Financial Times, The Economist, The American Banker, Accenture and Forbes, and has advised the White House on banking policy. A very warm welcome to you all, and sincere thanks to our 70+ speakers for your time and the insight you will share today. Of course, thanks also to our partners, especially our headliner OpenWrks, who have been with us since day one of our journey. As well as enjoying the content on offer, don’t forget to take some time to meet our partners in the exhibition area: they could be the key to helping you unlock your Open Banking potential. There is also a dedicated meeting space to take advantage of to make connections, discuss deals and share ideas with fellow attendees. Why not use the event app to suggest a meeting with a fellow delegate, speaker or partner? Collaboration is what will make or break Open Banking, so we hope that today will act as a platform to develop new relationships that will push us along that S curve. Enjoy the day. Adam Cox Co-founder & Managing Director, Open Banking Expo

Download the event app • Play the event game • View our partner profiles • Take part in the event poll • Ask questions to the speakers during sessions • View the latest agenda • View speaker profiles • Invite attendees to meet up • Receive event notifications • And more! Use your phone camera to scan this QR code, or go to your app store and install ‘CrowdCompass AttendeeHub’

Search for: OBE London Password: obexpo19 A word from our Headline Partner Another year in the life of Open Banking has passed us by and there’s been a lot of change. This time last year there were less than 40 businesses registered as AISP and PISP, now the ecosystem has quadrupled in size with 180 businesses now registered. This growth has been reflected in the ever-expanding range of services and products that are now available to consumers through the use of Open Banking. These new products and services are beginning to positively impact consumers. Take the launch of the digital debt adviser Tully as an example. Tully uses Open Banking to build accurate budgets and therefore, provide more sustainable debt advice. They can then offer flexible repayments based on what a customer can actually afford each month. Businesses like Tully are beginning to realise the real potential that Open Banking offers. As we enter the third year since Open Banking’s fruition, I look forward to seeing the positive results that Open Banking has on people’s lives. Be it access to affordable credit to help a person grow their business, identifying spending patterns that can send notifications to vulnerable consumers when they might be suffering from a spending spree and importantly financial education using real-time insights. I look forward to hearing the thoughts, views and insights from fellow industry leaders today on their experience from the past year and their predictions for the coming years. Let’s make Open Banking work to better people’s everyday lives. Olly Betts, Chief Executive Officer, OpenWrks

OPEN BANKING EXPO LONDON

FLOORPLAN 5

7 19

EXPERIAN ROUND TABLE

MAIN ENTRANCE

REGISTRATION

TEA/COFFEE

PAYMENTS STAGE

MEETINGS SPACE

MORTGAGES STAGE

Oct/Nov 2019

HEADLINE SPONSOR:

B E S O C I A L ! T W E E T # O B E E X P O & FO L LOW @ O P E N B A N K I N G E X P O

10 13 14

CLOAKROOM

OPENWRKS 121

STAGE 3

MAIN STAGE TEA/COFFEE

GREEN ROOM

STAGE 2

Key: 1 2 3 4 5 6 7 8 9 10

FriendlyScore Yapily Fiorano Software Computershare Modulr Virtusa Reflow Torry Harris Integration Solutions Equifax BJSS

11 12 13 14 15 16 17 18 19

Cashfac Experian CASHOFF Token Inc. Equinix TransUnion OpenWrks Nuapay Flybits

OPEN BANKING EXPO LONDON

08:00

09:30

REGISTRATION AND NETWORKING

Open Banking 2.0 In partnership with: The who’s who of Open Banking at the UK’s leading high street banks will lay bare the successes and pitfalls they have experienced since ‘go live’, and September’s 2019 PSD2 deadline. Between them they have a mezze of innovation labs, sandboxes and fintech tie ups. But what’s hot and what’s not? Our Chair will pose the questions you want answered to reveal what Open Banking 2.0 looks like for the high street.

08:50 WELCOMING REMARKS Olly Betts, Chief Executive Officer, OpenWrks David Parker, Chief Executive Officer, Polymath Consulting

09:00 KEYNOTE ADDRESS To prepare for the future, you must “Embrace Change, Take Risks and Disrupt Yourself”™. Named as one of the most influential people in banking and a Top Five fintech influencer to follow, Jim Marous is an internationally recognised financial industry strategist, co-publisher of The Financial Brand and the owner and publisher of the Digital Banking Report. With more than 83,000 twitter followers he has been featured on CNBC, CNN, The Wall Street Journal, New York Times, The Financial Times, The Economist, The American Banker, Accenture and Forbes, and has advised the White House on banking policy. Marous advises on innovation, portfolio growth, customer experience, marketing strategies, channel shift, payments and digital transformation within the financial services industry. Jim Marous

Hetal Popat, Programme Director, Head of Open Banking & PSD2, HSBC Lana Abdullayeva, Payments Innovation & Policy Director, Lloyds Banking Group Mark Curran, Director of Technology Transformation, TSB Bank Mike Sanderson, Open Banking Delivery Lead, BJSS Steven Pairman, Head of Digitisation and Client Access, Europe & Americas, Standard Chartered Søren Rode Andreasen, Chief Digital Officer, Danske Bank

10:15 Reality check - what have we actually achieved? It’s time for a reality check. Let’s take a step back and look at what was predicted for Open Banking and deep-dive into areas where we’ve excelled and where we’ve fallen short of expectations. With insights into previous platform wins and fails, I’ll be answering the question. Olly Betts, Chief Executive Officer, OpenWrks

11:15 to 15:40

Main Stage

Stage 2

Stage 3

Mortgages Stage

Payments Stage

Headline sponsor:

SPONSORED BY:

11:15-11:55 Fireside chat with the Open Banking visionaries In what will be the first interview since the September European-wide PSD2 deadline, we ask what’s next for the organisations that are shaping Open Banking here in the United Kingdom. The Competition & Markets Authority ripped up the rule book to create the next wave of digital transformation in the banking world, whilst the Open Banking Implementation Entity was tasked with the roll-out across the UK. This interactive session will reveal what is ahead beyond compliance and regulation, and which non-FS sectors are tipped to take advantage of Open Banking principles. Dr Bill Roberts, Head of Open Banking, Competition & Markets Authority Imran Gulamhuseinwala, Trustee, Open Banking Implementation Entity

12:00-12:25 Case study: Through the doors of RBS. How a CMA9 bank is modernising and delivering customer value through Open Banking. RBS was the first of the CMA9 to execute account to account payment services. The bank’s Head of Open Banking

will reveal its experience so far, and what the future looks like in an Open world. Including: • API enablement as a strategic imperative • Unique collaboration in establishing standards • Early insights on compliance, usage, and performance • How APIs are powering customer engagement and new propositions. Daniel Globerson, Head of Open Banking, RBS

12:30-12:55 Digital ecosystem opportunities in Open Banking Covering: • Best practices for building API-driven digital ecosystems • Scenarios prevalent in cross-industry offerings • Marketplace banking challenges • Products available in the market to accelerate the creation of API-driven digital ecosystems. Teresa Taibo, Lead Business Architect, Torry Harris Integration Solutions

13:00 NETWORKING LUNCH 14:00-14:25 Open Banking for Good; helping the most vulnerable in society Open Banking should be harnessed to help the most vulnerable in society, but is the industry doing what it should in this arena? Open Banking Expo has partnered with Nationwide’s Open Banking for Good challenge and The Money Charity; a percentage of your delegate ticket will be donated to this worthwhile scheme. In this session we will reveal: • The progress of Nationwide’s fintech partners, who are creating apps to help solve financial capability problems • Insight on why the industry should be working harder than ever to utilise banking data to assist the most vulnerable • What vendors at the coalface are doing to help make the shift.

• Staying at the top, acquiring customers and keeping them • How to pinpoint your marketing efforts so they align with

Erik Porter, Interim Chief Executive Officer, The Money Charity

Regulatory update from OBIE with technology at the heart Two months on from the initial PSD2 deadline of 14 September, where is Open Banking now? The Open Banking Implementation Entity’s Chief Technology Officer investigates. He will offer delegates a dive deep into: • How many banks have met the deadline? • What about those who didn’t? • What use cases are we seeing from TPPs, and how is this benefiting customers? • What’s coming next for banks, TPPs and customers?

Gareth McNab, Co-leader, Open Banking for Good Professor Sharon Collard, Research Director, Personal Finance Research Centre

14:30-15:10 Panel: The trailblazers of consumer adoption In partnership with:

Here are four trailblazers with one shared agenda: the need to provide compelling digital experiences in order to drive consumer adoption of Open Banking. These industry giants will dissect:

consumer behaviour, cultures and varying societies

• In today’s world, data is a commodity. How do we best utilise it to attract tomorrow’s customer?

Adam Davis, Head of Delivery, 11:FS Didier Baclin, Chief Product Officer, Zopa Keith Grose, Head of UK, Plaid Sven Schindele, Products Director, Tandem Bank

15:15-15:40

Chris Michael Chief Technology Officer, Open Banking Implementation Entity

Agenda correct at the time of going to print, and may be subject to change 21

We are a flexible Open Banking partner

Because we work hand-in-hand with AccountScore, our fintech partner, we offer agile and responsive Open Banking solutions.

Better understand consumer financial health

We can help you improve access to credit and make accurate and responsible lending decisions through the use of real-time current account insights.

Solutions that are as individual as your customers

With Open Banking creditworthiness, affordability and ID services live across all verticals, we would love to talk to you about how Open Banking could change your customer journey.

You will find us on stand nine, or contact us at eumarketing@equifax.com Equifax Limited is registered in England with Registered No. 2425920. Registered Office: 1 Angel Court, London, EC2R 7HJ. Equifax Limited is authorised and regulated by the Financial Conduct Authority.

OPEN BANKING EXPO

HEADLINE SPONSOR:

B E S O C I A L ! T W E E T # O B E E X P O & FO L LOW @ O P E N B A N K I N G E X P O

LONDON

Stage 3

SPONSORED BY:

11:15-11:55

12:30-12:55

European legal update This session will identify the challenges around the European Banking Association database and issues surrounding identity and regulatory checking of TPPs. Kai Zhang Associate Director, Bryan Cave Leighton Paisner

What Jerry Maguire can teach us about delivering Open Banking success A light-hearted look at how you gotta’ think like a customer, their needs, what they want and how Open Banking is the perfect opportunity to deliver a personalised service. So don’t mess it up by focusing on what your current technology can do and is limited by. Darren Hughes, Director, CASHOFF

12:00-12:25 A challengers view: API first, bank second How is fintech having such an impact on the financial world? The answer lies in the ‘tech’ of fintech, which represents not only modern software technology, but also modern technology practices and culture. This talk will look at how building a great API backed by a robust software product can help you survive in our cloud-based world, and how your digital transformation will fail if you try to change the tech without changing the tech culture. Jason Maude, Chief Technology Advocate, Starling Bank

13:00 NETWORKING LUNCH

14:00-14:25

• How Open Data can help change lives with Marketplace

Bigger data, smaller risk: The power when data collides Discover how you can improve lending decisions through the use of additional data not found in the traditional credit report. The combination of transaction data with other data sets can help to increase the number of credit approvals without increasing the credit risk. And it’s not just here in the UK. Discover how Equifax UK in partnership with AccountScore are leading innovation across our international business in 24 countries by blending Open Banking and CRA data, analytics, and technology to serve customers globally. Dan Weaver, Head of Innovation, Equifax Emma Steeley, Chief Executive Officer, AccountScore

•

Banking at the heart of innovation, offering consumers more choice than ever before Whether PSD2 is an enabler or hinderance when it comes to life after the Open Banking bang!

Chad West, Director, Marketing & Communications, Revolut David Joyce, Chief Executive Officer UK, Crealogix Faith Reynolds, Independent Consumer Finance Expert Gavin Littlejohn, Chairman, Financial Data and Technology Association Hakan Eroglu, Global Open Banking Lead, Mastercard Advisors

15:15 14:30-15:10 Panel: Global developments in an open finance world This panel will bring together global Open Banking visionaries who have all had a key role to play in regulation, implementation and innovation within their own regions. We’ll take a look at: • How we’re moving towards an Open Finance world, and what this means for other financial services platforms outside the initial banking system

Quick fire regulation overview Session will cover: • How regulations are driving the implementation of Open Banking • Open Banking beyond PSD2 • The opening of data that can be used for financial services from different sources Polina Evstifeeva, Head of Regulatory Strategy for New Ventures, Deutsche Bank

Agenda correct at the time of going to print, and may be subject to change 23

Computershare Loan Services is a leading provider of outsourced mortgage solutions, currently managing ÂŁ100 billion of assets on behalf of our clients. We provide a robust, compliant and efficient end-to-end solution to manage your mortgage assets. We can also help maximise the value of your portfolio. Get in touch to discuss how we use the latest financial technology within the mortgage journey for our clients and their customers. Email: sales.loanservices@computershare.co.uk

www.computershare.com

OPEN BANKING EXPO

HEADLINE SPONSOR:

B E S O C I A L ! T W E E T # O B E E X P O & FO L LOW @ O P E N B A N K I N G E X P O

LONDON

Mortgages Stage

SPONSORED BY:

11:15-11:55 Panel: What has Open Banking done for mortgages? The principal benefit of Open Banking to the mortgages sector is loud and clear; the streamlining of the application process, making it quicker and slicker for the consumer. Providers should be chomping at the bit to adopt Open Banking, but are they? Has the industry promoted the benefits enough? Has it responded with innovative products and services? Our panel of industry experts will review the last 12 months and whether Open Banking will shake up the mortgages market forever. Jack Price, Managing Director, UK, Computershare Communication Services Sue Rossiter, Principle, Mortgage Regulation, UK Finance Vanessa Northam, Head of External Relations, Tully

12:00-12:25 Digital ecosystem banking: Operationalizing a functioning mortgage bank in 30 days We operate in an increasingly integrated economy where customer expectation requires immediate access to financial services directly within digital marketplaces, platforms and communities. The advance of Open Banking enables increased competition for banks with payments (PISP) and data driven (AISP) use cases emerging that provide customers with new ways of accessing financial services.

Neo/challenger banks have proven that it is possible to disrupt the status quo. These challengers, together with fintech and big global tech are building a new FS ecosystem that presents a real competitive challenge to traditional banks. Banks now need to embrace the need to complete and participate in this new FS ecosystem, but are they ready for the challenge? Mike Kennelly, Senior Director, FS Technology, PwC

12:30-12:55 Case study: A mortgage made in heaven? It’s a common belief that fintech will disrupt banking but collaboration – not competition – will be the primary driver of disruption. The biggest near-term threat to most banks comes not from fintechs but from traditional competitors better leveraging those fintechs. (Source: EY) In this discussion, Starling’s Head of Marketplace and CreditLadder’s chief executive officer will reveal: • How the fintech approached and navigated the partnership • How the bank effectively collaborated with the fintech to help drive financial inclusion • What the benefits are to bank, fintech and importantly the end consumer • What the future holds for banks and fintechs working together. Anna Mitchell, Head of Marketplace, Starling Bank Sheraz Dar, Chief Executive Officer, CreditLadder

13:00 NETWORKING LUNCH

14:00-14:25

14:30-14:10

How Open Banking could help vulnerable customers There is little doubt that the growing pace of Open Banking can enhance the customer journey when it comes to mortgage services and solutions, but how do we ensure vulnerable customers aren’t left behind? With the enhanced use of data, as an industry we can really begin to help customers better manage their money and make it go further – but there is a risk that some people may be digitally excluded. Computershare offers its REPAY tool to empower customers to take ownership of their debt, which in turn offers mortgage lenders the opportunity to rehabilitate customers whilst seeing cost savings, higher collections rates and reduced collection times. Interested? Find out more in this session.

Panel: The future of mortgages: what can you bank on? Our panel of experts will take a look at the next 12 months in the mortgages market. What will flourish, what won’t? What regulation is on the horizon, and what innovation is needed to reenergise the sector?

Jack Price, Managing Director, UK, Computershare Communication Services

David Heffron, Partner, Pinsent Masons Pete Stanley, API & Open Banking Lead, Yorkshire Building Society Richard Hayes, Chief Executive Officer, Mojo Mortgages

15:15-15:40 The Mortgage Market Study: 6 months on On 26 March 2019, the FCA published its final report on the mortgage market. It found that the mortgage market works well in many respects; engagement is high and consumers are getting mortgages that are suitable and affordable. However, it also found that the mortgage market falls short of its vision in certain ways, leading to harm for some consumers who pay more than they need to for their mortgage. Sue will uncover the opportunities that are emerging for Open Banking to reverse this trend. Sue Rossiter, Principle, Mortgage Regulation, UK Finance

Agenda correct at the time of going to print, and may be subject to change 25

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Virtusa Corporation (NASDAQ GS: VRTU) is a global provider of digital business strategy, digital engineering, and information technology (IT) services and solutions that help clients change, disrupt, and unlock new value through innovation engineering. Virtusa serves Global 2000 companies in Banking, Financial Services, Insurance, Healthcare, Communications, Media, Entertainment, Travel, Manufacturing, and Technology industries.

OPEN BANKING EXPO

HEADLINE SPONSOR:

B E S O C I A L ! T W E E T # O B E E X P O & FO L LOW @ O P E N B A N K I N G E X P O

LONDON

Payments Stage

SPONSORED BY:

11:15-11:55

12:00-12:25

Panel: Payments Punch Up In partnership with:

Here we will explore the future of the payments landscape with regulation, innovation and strategy at the heart of the debate. Delegates will enjoy four unique views from all corners of the market as each continues to grapple with product evolution, heightened competition, and increased regulation.

The future of payments: transformed by technology As Open Banking explodes, merchants are rapidly transforming their operating models to compete in a new payments world. What will it look like in 2030? Pay.UK, the UK’s leading retail payments authority, gives us its predictions. Kate Frankish, Director, Strategy & Standards, Pay.UK

Adrian Smyth, Head of Innovation, RBS

12:30-12:55

David Head, Open Banking Products, Mastercard

Show me the money With a major Open Banking regulatory milestone being reached in the UK and Europe, banks need to focus on what’s beyond compliance. Monetizing the investments in Open Banking compliance is becoming vital for long-term success. In this session, Virtusa’s Global Head for Banking will elaborate on: • Recommendations for effective API monetization • Different strategies banks can adopt for Open Banking • Potential use cases and how they can be adapted to various strategies • How to co-create new business models leveraging fintechs, customers and developer community.

Manish Garg, Founder & Chief Executive Officer, reflow Sujata Bhatia, Senior Vice President, American Express Tony Craddock, Director General, Emerging Payments Association

Amit Bhute, Global Head, Banking & Financial Services Practice, Virtusa

13:00 NETWORKING LUNCH 14:00-14:25 All for one and one for all Come and find out what the Three Musketeers has to do with payments! Faith will provide new insight on the access to cash conundrum and how without conquering access for all customers we’re still some way off a cashless society. She will examine recent innovations within the payments landscape, in particular services that are being developed for all end users, including those who do not use ‘traditional’ banking services. Faith Reynolds, Independent Consumer Finance Expert

14:30-15:10 Panel: Securing real-time payments With the rise of global industry regulations, security breaches, digitisation and consumer expectations for convenient, seamless and real time services, there is a drive to improve how we secure and authenticate customers that is less fragmented and more collaborative. Our panel will discuss the real security risks and share real-life examples of what they are doing to secure customer payments.

Juan Jiménez Zaballos Head of Financial Industry Transformation, Banco Santander Mark McMurtrie Director, Payments Consultancy Nilixa Devlukia Chief Executive Officer, Payments Solved

15:15-15:40 Case study: Visa and its Open Banking journey so far In April 2019 Visa unveiled a platform with a set of beta APIs and development tools that help issuers and issuer processors build and test digital payment products. Available to the payment giant’s clients and partners through a new site, Visa Next, the platform promises to help re-imagine how people access, manage and control their money in the digital age. In this session, Visa’s Senior Vice President for Open Banking will reveal latest progress, future strategy and predictions for 2020 and beyond. Mark Nelsen, Senior Vice President, Open Banking, Visa

David Malley Senior Payments Consultant, RBS Agenda correct at the time of going to print, and may be subject to change 27

SME FOCUS

SMEs: not fit to serve in the Instant Economy? Myles Stephenson Chief Executive, Modulr

e’re in the fourth age of money, the next leap in the evolution of commerce, where all aspects of the existing economy are moving into the digital sphere. This is the Instant Economy, where businesses can instantly access and consume services to bring innovative and game-changing products to market at the pace dictated by enduser demand. But it is fast leaving SMEs behind in one area: payments. Below the surface, and giving rise to such convenient services, is a controllable technological infrastructure, removed from the legacy constraints of physical mainframe IT. It is a flexible and efficient infrastructure, where cloud technology makes services scalable with nearunlimited processing power. API calls initiate a synaptic pulse of automation with instant and real-time consequences to deliver great value to end-users, leading to market ubiquity with only a handful of years in operation. But what of the vast majority of SMEs – the ones accounting for 60 per cent (16.3m) of all private sector employment and 51 per cent (£1.9trn) of annual private sector turnover – are they equipped to serve the Instant Economy? Payment ‘tech debt’ The industries and businesses who are only now shaking off legacy technology are fast being left behind as digital-first start-ups overtake and replace them with new technology. None more so than the 25,000 accountancy practices providing mission critical bookkeeping for some two million of the UK’s SMEs, according to an EY report; managing salary and supplier payments and keeping cashflow healthy. While automation has brought cost savings and efficiency to the 28 O P E N B A N K I N G E X P O . C O M

front office, the same cannot be said for back office payment operations; partly for the sheer size and complexity of the wider antiquated payments infrastructure. The so-called ‘tech debt’ presents a monumental task to bring the UK’s payment infrastructure into the Instant Economy, let alone pass on the benefits to SMEs. Since the financial crisis, SMEs and their payment needs have only moved as fast as the regional accountants who serve them, or the commercial banks who see SMEs as oversized retail customers or small-scale corporates. This has resulted in a fragmented approach to SME payment services, and one we experienced ourselves during the set-up of our first business. Of particular frustration was the labour required to manage incoming payments and reconciliation, and the inability to automate the supplier payment process. The new technology of the Instant Economy is bringing the inefficiencies and manual nature of bookkeeping into serious question. Why is there such a disconnect between accounting software and business banking, forcing accountants to transfer files and duplicate data sources? Why do accountants need to spend hours manually reconciling and making payments to SME employees and suppliers? It is little surprise to learn that a recent survey by Allstar Business Solutions found over half of business owners struggled to sleep due to worries about cashflow. But new challengers are encouraging SMEs to imagine a world where seamless payments aren’t the luxury of large corporates. Instead, they ask them to imagine payments

that just happen behind the scenes, quietly and effectively. Bringing SMEs in line The inefficiency of the current payments infrastructure is that it is too slow, difficult to track and overly reliant on manual processing. This limits transactions, limits business and limits economic growth. This is unacceptable for SMEs, who are themselves facing a tipping point as their customers expect greater convenience, their fellow businesses demand real-time decisions and confirmations, and the regulator creates more change and complexity. But the world of payments is changing rapidly, bringing with it new ways of moving money and fundamentally transforming the way commerce operates. Following the challenges to divest the branch-based SME arm of RBS, Williams & Glyn, the Alternative Remedies Package was agreed in 2017 with the overarching aim of encouraging innovation and competition within SME banking. In August 2019, Modulr was one of four companies from a pool of 76 applicants awarded £10m from the Alternative Remedies Package to drive our firm conviction that SMEs deserve simple, secure and reliable payment capability. We’ll be partnering with accountancy practices and software providers, including Sage, to roll out improved payment functionality. It is not a case of replacing traditional service providers but working with them to build a robust and profitable ecosystem for all. ■

➽ If you would like to comment on this opinion piece, please email us at: editorial@openbankingexpo.com

Modulr is a business payments platform that works closely with banks, regulators and other providers to build a smart payments network. Oct/Nov 2019

OPEN BANKING EXPO CANADA

Open Banking

A Canadian Lens Senior representatives from Canadian financial institutions debated the drivers of Open Banking and their methods of implementation at last month’s Toronto event, Open Banking: A Canadian Lens. The Open Banking Expo event, in collaboration with Equifax, was attended by over 200 people in the sector.

ast month, Royal Bank of Canada, CIBC, National Bank of Canada, Citibank and challenger bank Equitable joined an eye-opening debate into what they believed would be the future of Open Banking in the country, along with the challenges it faces. Speaking to delegates at the Open Banking Expo event, Carolyn Burke, head of enterprise payments for the Royal Bank of Canada, said consumers needed to know that the banks “had their backs” before they would be willing to trust Open Banking; in the same way that they had to trust banks to c over their online shopping transactions following the growth of the internet. Mayank Mishra, Citibank’s managing director and global head for digital channels, said that speed and agility of APIs would be key to Open Banking success because they are fundamental to great customer experience. “The customer experience has to be the central part of what we do as part of Open Banking,” he said. “It’s important because customers will now have a choice at each and every

stage of their life cycle to pick the right partner for them, rather than being stuck with a particular bank for the entire value chain.” To that end, he said API standardisation needs to become faster and more agile so that financial institutions can ensure they are competitive and can provide services their customers want. The event offered unique insight into the Big Six banks’ plans, should Open Banking be regulated in the region. That decision is currently undergoing a government consultation but the general consensus was that it was a case of when, not if, Open Banking would be implemented. In an event poll on what the key benefit of Open Banking will be, 30 per cent said enhanced product innovation, closely followed by 26 per cent citing financial inclusion and 24 per cent expecting it to stimulate competition. A common theme across the event was that the term ‘Open Banking’ is causing a branding crisis. ‘Open’ and ‘Banking’ in the eyes of the consumer are two words at odds with each other and could pose a feeling of mis-trust, experts felt. ›

OPEN BANKING EXPO CANADA

› Canadian financial institutions need to take a proactive role in meeting the future financial needs of consumers and small businesses with new technological solutions. That includes bringing customers along and gaining trust. Andrew Moor, president and chief executive of Equitable Bank, said Open Banking is critical for the entire financial sector in terms of fulfilling the needs of consumers from all income backgrounds, as well as small businesses. “Open Banking is really important in Canada

The proponents of a market-led solution would argue that there’s a strong history of acting proactively and collectively to meet a government objective. Adam Felesky Chief Executive, Portag3 Ventures

in terms of providing a social licence for the whole industry. We need to fulfil the needs of the population of Canada, whether it’s people that are struggling financially, or the fabled middle class,” Moor said. He added: “I would include as amongst our greatest service, the needs of small business. There’s an asymmetry between the data that the small business has and how we serve them. Open Banking can go a long way to helping small businesses be more vibrant, get

Oct/Nov 2019

OPEN BANKING EXPO CANADA

better access to capital, and through that create jobs and employment prosperity in the community.” Data sharing is well-established Reflecting on how consumers benefit from new technology, Carolyn Burke, head of enterprise payments at Royal Bank of Canada, said it is important to remember that a version of Open Banking has

The customer experience has to be the central part of what we do as part of Open Banking. Mayank Mishra Managing Director & Global Head for Digital Channels, Citibank

existed in Canada for two decades. “The ingredients where businesses and consumers who wanted to see a full picture of their financials, using bank credentials to take information in, [are there]” she said. “The security of that channel has been enhanced over time, but the ability to bring partners and data together to improve lives has been around in North America for over 20 years.” ›

OPEN BANKING EXPO CANADA

75% of respondents are not interested in Open Banking

91%

Financial institutions could benefit from a 20 per cent increase in profitability if they embrace Open Banking, said Andrew McFarlane, managing director of financial services at Accenture. “We are now seeing disbursement of products and services, with customers willing to hold products and services with a variety of different institutions, be it with an incumbent bank, a fintech, or a non-financial institution,” he said. “A number of these players are really becoming household names in their own right. They are playing in specific niche spaces, partnering with institutions and are taking on institutions to really look at disrupting the financial services market.” These companies are breaking apart the traditional banking model as we know it, McFarlane said. Customers want personalised insights; they want to be known by their institution. And they want to have insights that add value from a financial and a non-financial point of view. Companies that successfully respond to these new demands from consumers stand to gain, with Accenture estimating they could see a 20 per cent uplift in profits. “The challenge is, if you choose to ignore, and if you choose to become basically just a utility player, and effectively the provider of a funding account on the end of the Open Banking value chain, then we see certainly a maximum downside of up to 29 per cent of your payments revenue,” he added.

BUT 71% said additional security measures would help address those concerns

1in 5 would share their data with third parties if it meant getting a better deal or other benefits

1/3 of 18-44 year olds were happy to share their data with non-banking third parties

Source: Accenture

Canadian banking profit boost?

said this was because of privacy

› However, Canadians are hacking their way to Open Banking through high use of screen scraping products, said Adam Felesky, chief executive of Portag3 Ventures. Felesky agreed it is a myth that the market lacks use cases for Open Banking, saying aggregators are seeing strong demand for their services, most of which involve screen scraping. “There is real demand and, to the opponents of Open Banking who dismiss it on the merits of security, we believe screen scraping is much less secure,” he said. “An Open Banking framework actually protects them more.” The challenge, Felesky added, is how to achieve this and whether it should be through a market-led solution or a government-led solution. “The proponents of a market-led solution would argue that there’s a strong history of acting proactively and collectively to meet a government objective,” he said. “Many would point to Interac [the Canadian interbank network for electronic transactions] as a great example and, by many measures in terms of adoption, it is world class and has been an incredible success.” Nevertheless, Felesky said that, in the world of payments modernisation, Interac’s involvement has led to continuous delays, partly because the company needs to deal with a dual mandate, and government partnership is often difficult. He added that, given five banks control more than 90 per cent of the market, the government should play a leading role and existing market participants should not choose who is credible and who is not.

Oct/Nov 2019

OPEN BANKING EXPO CANADA

“This is potentially anti-competitive and contrary to an Open Banking digital framework,” he said, adding that a new regulatory body would need to set standards and credentials for market participants. “It does feel like we’re making progress. However, we’re clearly behind many jurisdictions and need to think more broadly about how we protect consumer trust and how we compete.” Challenges for implementation Ahead of likely implementation, Canadian financial institutions are sizing up the challenges ahead. For Eyal Sivan, head of strategic platforms at CIBC, a major challenge for the banking sector in implementing Open Banking is finding a balance between what is being driven by regulators and what is being driven by market demand. “One thing you hear about all the time is what is regulatory-driven versus marketdriven,” he said. “Some people feel the regulator should be incredibly prescriptive. Some people feel that regulation should not be part of the solution at all.” Similarly, Michael Legare, vice president of digital transformation at National Bank of Canada, said consumer awareness continues to be troublesome for the sector, and this amplifies the challenges that institutions face. “I think there’s a real opportunity here in Canada to think about how we approach this properly so that we treat Open Banking as a springboard to help our Canadian institutions,” he said. “If you look at it from a fintech perspective, even if they were to partner with every large bank in Canada, that’s still somewhat of a limited market when you compare it to other fintechs around the world who are opening up to ›

OPEN BANKING EXPO CANADA

Trying to replicate one jurisdiction from say Singapore, or Australia, wouldn’t be the right way forward. Rizwan Khalfan Chief Digital & Payments Officer TD Bank Group

TD Bank calls for ‘made in Canada’ approach Canada’s Open Banking system should refrain from copying existing frameworks and adopt its own principles-led approach, a top banking expert has urged. Rizwan Khalfan, chief digital and payments officer at TD Bank Group,said the Open Banking frameworks of other countries such as the UK were too prescriptive. He said Canada should create its own independent Open Banking standard. “Other jurisdictions have gone down a prescriptive path. I’ve spent time in the UK, I’ve talked to other jurisdictions, and I think in Canada our opinion is let’s respect the principles-based approach,” he said. Despite Canada being behind other countries in its implementation of Open Banking, Khalfan believes Canada’s reputation as a financial innovator will make its future Open Banking system a leader in the industry. “Sometimes I scratch my head and go, wait a second, we’re trying to copy this other jurisdiction? Why? What are we really trying to solve? And would they have been trying to emulate us? We have the highest digital adoption and engagement amongst all G8 countries. Canada’s financial

system is the envy of them,” he said. Khalfan added Canada may benefit from adopting a hybrid approach to Open Banking where it uses the best standards of other countries to create a Canadian framework. “Trying to replicate one jurisdiction from say Singapore, or Australia, wouldn’t be the right way forward. I think we pick. What do we learn from the UK? Maybe the standards from the UK. What did we learn from the US, maybe the bilateral contracts in the US.” He told delegates five per cent of its digital customers in Canada have given up their credentials to a third party through practices such as screen scraping and warned Canada needs to introduce Open Banking as quickly as possible to protect customer privacy and avoid data breaches. “We don’t want it to get to a point where it’s such a big problem. We don’t want it to be half our customers [giving up] their credentials, that’s not beneficial to them, or ourselves,” he said. TD Bank has already invested in API infrastructure, which went live in the US in July. The bank aims to leverage the same infrastructure in Canada and use it in 2020.

› a broader range of institutions. How do we support an ecosystem here in Canada so that we compete on a global stage?” Others said Canada’s payments system still has a long way to go in terms of becoming modernised, which they believe is holding back innovation. Moor said it still takes days, rather than minutes, to move money from one bank to another. “That’s a public embarrassment,” he said. “We are working hard on the real-time rail, but I feel like I’ve been waiting forever for it and it’s still a couple of years away.” However, Royal Bank of Canada’s Carolyn Burke defended the system, saying that while the real-time rail doesn’t exist just yet, the country has had near -real-time payments for 20 years, which pre-dates most other countries. Ultimately, the best way to move the industry forward is for banks, fintechs and other interested parties to cooperate and collaborate with each other, and to move more quickly to develop standards that help customers. ■ For more information, or to register your interest for the next Canadian event, please contact adam.cox@openbankingexpo.com.

Oct/Nov 2019

EXPANDING POSSIBILITIES IN OPEN BANKING

bjss.com/financial

★

★ ★

OPEN BANKING EXPO EUROPE

Europe and the Open Banking phenomenon

The single biggest lever for achieving success in Open Banking will be in finding the use cases and experiences that add value for customers and drive adoption. That was the strong message during discussions at Open Banking Expo Europe, on 4 October in Amsterdam. However, players face regulatory and collaboration challenges…

ow can the industry accelerate consumer adoption of Open Banking products? That was one of the many questions posed at Open Banking Expo’s inaugural Europe event last month. Headlined by Open Banking platform provider Token Inc, the event welcomed around 200 delegates from the worlds of financial services, fintechs and regulators. Lana Abdullayeva, Group CIO at Lloyds, said the crucial success factor for the sector is offering consumers real benefit. “When we started building our platform, we learned that adoption began to increase when we started to offer something valuable and sensible to consumers.” Abdullayeva said consumers won’t take up new services or means of account access without good reason. “So, as a customer, yes, I’ve got the app and I can connect my accounts, but so what? Maybe out of curiosity or as an experiment I would do that, but then so what?” She said that for both business and individual customers to use new Open Banking capabilities in a sustained way, there needs to be compelling value as part of that service – such as the provision of cash management or accounting functionalities. ›

When we started building our platform, we learned that adoption began to increase when we started to oﬀer something valuable and sensible to consumers. Lana Abdullayeva, Payments Innovation & Policy Director, Lloyds Banking Group

OPEN BANKING EXPO EUROPE

Case study: Open Banking takes flight Open Banking has officially flown into the travel sector, the International Air Transport Association told delegates at the Amsterdam event. Javier Orejas Saldaña, head of banking Services EMEA & the Americas for the International Air Transport Association (IATA), explained that an Open Banking solution is now powering a unique industry-focused form of payment for airlines. IATA is a membership organisation, representing 286 companies who make up around 86 per cent of all airline tickets sold worldwide. Beyond lobbying authorities and working to improve industry standards, IATA also provide financial services support to 186 countries and last year processed 400 billion USD for the airline industry. Looking to leverage the current changes in the payments industry and offer customers a frictionless way to pay for tickets directly through airline websites, the organisation has developed IATA Pay. “We wanted to create a standard solution for the industry – and IATA Pay is built by airlines for airlines,” said Saldaña. “This method offers an extremely high level of security to both user and recipient and can be instantaneous. We are currently focused on Europe but hope this is something that will facilitate standards worldwide.” Currently, 85 per cent of direct airline bookings are made through cards. Two years ago, the amount paid by airlines in interchange and the cost of fraud was $8bn – and this is expected to rise to $15bn in the next three years. “It is a huge cost for airlines to process payments just to be able to sell tickets,” said Saldaña. “The ambition for IATA Pay is to become a universal acquirer, across geographies.” IATA Pay has been tested for over a year. “We have been running a prototype in Germany and developing the final stages of the solution in the UK. We have also been looking for features that will enhance the value proposition and key to that is refunds. IATA Pay offers airlines accelerated, same day settlement of funds. The same applies for refunds – it powers real-time refunds, something which is important to the customer.” In September, IATA Pay successfully completed the first ticket purchase transaction in a live test environment. The live test was conducted under the UK’s Open Banking framework with IATA Pay pilot airlines, including Cathay Pacific Airways, Scandinavian Airlines and Emirates. The solution will roll out worldwide over the coming months. IATA Pay will also be looking to extend into Asia and the Middle East and include some digital identity functionality, which is currently under development. There are still challenges to address, including looking at some of the gaps that most Open Banking solutions have – such as the ability to support payments split into instalments. This is something IATA are keen to address since they believe it will help drive adoption and ease for customers. Saldaña also highlighted the importance of customer education and the need to inform and explain to customer. “It is the only way that consumers are going to understand the benefits versus other forms of payment.”

› Oliver Dlugosch, CEO of API platform provider NDGIT, added: “Over time, we will see stronger use cases that support better funds management, faster, better loans etc. and this will help drive adoption – if consumers really get something back out of it”. In an event poll, delegates were asked how much impact Open Banking would

Over time, we will see stronger use cases that support better funds management, faster, better loans etc. and this will help drive adoption – if consumers really get something back out of it. Oliver Dlugosch Chief Executive Officer, API Platform Provider, NDGIT 38

have on the industry - 67 per cent of attendees felt that it would pose considerable change with unpredictable impact and 25 per cent said it would change everything. Only nine per cent of respondents said it would have no or little change. Driving adoption Panellists in a debate chaired by EY’s associate partner Jeroen van der Kroft were unanimous in their opinion that finding the right use cases was vital for driving adoption. “Open Banking will dramatically change the way consumers interact with their service providers” said Piet Mallekoot, CEO of the Dutch Payments Association. “It will also address the need for customers to get faster and more flexible access to services. It will take time but there are big chances for providers in all areas to unlock value in the supply chain. At the moment, Oct/Nov 2019

OPEN BANKING EXPO EUROPE

BBVA takes an open-minded approach Carmen Cuesta, Senior Manager – Enterprise Solutions Strategy at BBVA, explained how the bank is securing its place in the Open Banking ecosystem. BBVA’s Open Banking journey started in 2013 when it launched an initiative to open up to third parties and see how it could introduce innovative services. The bank is now doing this every year in different countries where it has a footprint. “Not only have we found innovative products and services this way, it has helped us find new talent to bring on board and work within our teams,” said Cuesta. In February 2014, BBVA acquired Simple Bank – a fintech based in Portland, Oregon. “They were doing financial services in a different way – not offering products, but offering an experience. We had plenty of things to learn from them. We wanted them to continue with their roadmap without merging with our brand. We also wanted to be the infrastructure that they needed in order to create their user experience. So, we had to build some APIs for them to open accounts, issue cards and move money,” said Cuesta. The acquisition was the first step towards launching BBVA APIs into the market, which the bank did first in Spain with more than 12 APIs. This was repeated in Mexico and then the US, which is focused on Banking-as-a-Service delivery. “We wanted to repeat our experience with Simple Bank and work with other fintechs, but we didn’t need to acquire them all to let them build products and services over our infrastructure,” she said. “This has been interesting for us as it provided a new revenue pool for our bank in the US. It also meant we could enlarge our distribution network because customers coming from partner businesses are also becoming our customers through cross-selling.” BBVA have also chosen to cast their collaboration net further, by joining Red Seas Hub a developer portal that many Spanish banks are involved in for compliance. “We are trying to develop a high level of interoperability” explained Cuesto. “Joining Red Seas means most of our processes are shared with other banks and we can separate compliance issues from our commercial approach.” She added that BBVA sees PSD2 as a great opportunity to compete. “We as a bank also get to deal with data coming from other banks, which helps us know our customers better to give them what they need and create user experiences that give added value.” “Open Banking requires an open mind. Open Banking is about collaborating with third parties, opening up your infrastructure and showing your assets - that is something that is not always well understood as a bank. Many are afraid of losing business or being cannibalised by those using your APIs. Open Banking is about much more than launching API platforms, or trying to offer BaaS services, or a white-label service - it is about being open to collaborating with third parties and about selecting the partners who can help you tomorrow.”

there isn’t much traction in the consumer market, it is about building the killer app for the consumer”. Philippe Rousseau, head of commercial at payments firm Klarna, said customer experience is being stymied by technical capabilities. “The quality of available APIs definitely isn’t helping adoption. Consumers want a great customer experience – if they enjoy it, they adopt it quickly. They want everything at their fingertips and for services to be quick and easy. Removing the friction is where we need to put our focus.” The fintech impact The panellists discussed the rise of fintechs and other new players. Søren Rode Andreasen, chief digital officer for Danske Bank, felt that the competition from fintechs was not as strong a threat for banks as some might expect.

“Firstly, banks know how hard it is to acquire customers, but fintechs have underestimated this. Secondly, trust is a very important factor – consumers are very careful about money and people don’t just trust a brand they don’t know. Some of the business models from fintechs and challengers don’t make sense, haven’t been qualified or checked to see if there is sufficient need there,” he said. “You have to work really hard to be one of the (on average) nine apps that people use daily. You have to have a unique value proposition.” When questioned on the impact that BigTechs may have on the banking space, Andreasen said their impact on the banking industry will take longer than most people expect. “They are intruding on banks’ territory but I don’t think they wish to be banks and to be regulated. They are more into partnerships. Banking is a very different industry, data

is a much bigger concern for instance and lending – where the money is – is very different to where they are now. This is something the BigTechs will find out.” Both Dlugosch and Mallekoot agreed that partnerships between fintechs and banks were the perfect answer for all parties going forwards. “It’s a good combination because fintechs have the best technology and know about customer journeys, whereas banks are good with compliance and they have the distribution channels and customer trust” said Mallekoot, who warned against the further fragmentation and resource challenges that would be caused by banks ‘going it alone’. PSD2 predictions The Expo took place shortly after the PSD2 directive rolled out across the European financial services landscape. However, the panel agreed that they don’t expect to see huge impact from PSD2 in the next five years. “I don’t think there will be that big of a change by 2025 – it will take longer than we all thought it would,” said Rousseau. “We have to remember that PSD1 took a good 10 years to embed and have an impact - and PSD2 is more complex” added Abdullayeva. With more than 20 countries around the world now trying to define their own Open Banking standards, in some regards the sector is on a positive road. However, speakers said the industry needs to be focused on finding the › 39

OPEN BANKING EXPO EUROPE

› right balance between customer usability and security, as well as making sure it feeds back to the relevant authorities about what is and is not working in terms of the regulatory standards. These factors will be key in ensuring the positive trajectory continues. The lack of a standardised approach to APIs has also presented a major challenge in the implementation of Open Banking. For the first time, the event brought together regulators from the UK, France and Germany to discuss if Open Banking can ever realise its potential with more than one standard. Hervé Robache, PSD2 API coordinator, at STET, told delegates that multiple standards were not necessarily a problem.

It is a huge cost for airlines to process payments just to be able to sell tickets. Javier Orejas Saldaña Head of Banking Services EMEA & the Americas, IATA 40

“Having several APIs isn’t the worst thing – it’s a good chance to get some ideas and to find the best track to move towards a single solution, if any, in the future,” he said. “Market fragmentation is so deep within Europe with different payment instruments in use from one country to another. Having more than one standard offers the chance to have different solutions to suit different markets.” Wijnand Machielse, European markets director at the Berlin Group, agreed that the number of standards in Europe is not unmanageable. “There are only a handful, which is not too much of a problem. If TPPs are working on these few standards then they are able to cover the whole market. Plus, it keeps everyone awake and creates more innovation in the end. Having these few would, in my view, certainly not be something that stops the success of Open Banking.” Machielse added: “We have 62 organisations participating in our standard, across 30 countries in Europe - and 3,000 banks have already implemented it. They are acknowledging the power of the API economy, no longer seeing it as just a compliance effort, and they are focusing on premium services.” However, this view was not shared by all. “While I do like the idea of diversity and learning from each other, I actually think it’s important to have one standard and it would be great for Europe to have one,” said Imran Gulamhuseinwala, Trustee at the UK Open Banking Implementation Entity. Oct/Nov 2019

OPEN BANKING EXPO EUROPE

Spotlight on ING: Creating an open ecosystem Collaborative, connected, customer-centric ecosystems are the key to innovation in an Open Banking world, according to Mark Buitenhek, Global Head of Transaction Services at ING and member of the Board of Directors at SWIFT. In the closing keynote at Open Banking Expo Europe, Mark Buitenhek gave an inspiring overview, suggesting that, to remain a part of the future of banking, service providers need to think differently and become purpose-driven. This customer-centric premise is key to ING’s approach. “The future of retail banking will be digital and in particular, mobile,” said Buitenhek. “At ING, 26 per cent of our customers are only doing mobile transactions – they have never visited a branch or ATM, or used online banking. This number is growing by the month and we estimate it will reach as high as 50 per cent. This shows that experience is everything.” Despite this, he still feels that banks are a long way from getting the focus and delivery right. “In a poll at the recent Sibos conference, 80 per cent of bank CEOs in the room said their customer experience is already great. But, when we asked the customers of those banks, only eight per cent agreed!” This disconnect is why a change in thinking is needed, he said. “We knew we needed to build one instance of our technology, and to become data-obsessed – to integrate all our data into our processes, thinking and decision-making. If you have one technology stack, you’re able to scale and you’re data-obsessed, then is the moment to create stickiness – to make people keep coming back.” Since 2014, ING has been working to connect all the different countries it operates in under one developer portal, one service environment with one key platform, including connecting all databases together. “It was a high risk undertaking to do this in 3-4 years when the specifications [for PSD2] weren’t yet set. However, we felt that if we didn’t do this, connecting all those dots and creating that foundation to go forward, we’re going to lose the game,” he said. Buitenhek added: “An individual country by country approach would’ve been easier to do, (although probably more expensive in the end) but it wouldn’t have put us any further forward in the Open Banking world.” ING now has close to 40 million customers using one access to account solution across Europe. In addition to its own platform, the bank has actively created or pursued independent platforms, because the bank determined it was “better to invest in these avenues and disintermediate ourselves rather than let others do it”. Buitenhek warned that the challenges ahead mean that banks cannot be successful on their own and there is great value in forming strong partnerships. “Regulation, digitalisation, internationalisation and the speed of change mean we need help. We discovered a few years ago that if we don’t take the help and inspiration from external worlds we won’t live. We need help from the fintechs and innovative companies to speed things up and create a different culture.” He added: “The way we see it, many people that know a little, may know a lot together. This is how people start getting inspired and we all start moving ahead.” ING currently works with around 160 partners, 20 of which are investments made by the bank, the rest different forms of collaboration, including short term agreements. Buitenhek said it is important to be honest when partnership arrangements aren’t working: “Sometimes you have to say goodbye, you have to be prepared for that too. It’s important to show that you dare to say goodbye and that it’s OK to make mistakes and come back with another option.”

“It’s important to only have one standard in each country, but the truth is that banking markets are quite different from country to country despite the efforts of regulators. The ecosystem has to get to some kind of critical mass – standards only work if you get to a critical mass. At least if we’ve got a single country on one standard, you give it the best chance of working.” He added: “In the UK about 99 per cent of consumer and business bank accounts are using one standard. The key is that the standards aren’t working

but that there is an opportunity for them to converge. However, I don’t know how or when that would happen.” Working with multiple standards Representing the viewpoint of TPPs, Paul Meadowcroft, chief product officer at ID and regulatory checking service Konsentus, added: “The good thing about standards is there are so many out there to choose from. However, the way that financial institutions are implementing them also varies. This makes it very difficult for TPPs to

develop and maintain their codes.” “It takes time and investment to develop across all these API standards. The regulation was put into place to open up the European market so that people could do cross border in a consistent way and I don’t think we’re very near that right now. There is some strength in variety, but we do need to look to the future and work towards a more common standard across Europe, to make sure we realise the aspirations of PSD2.” Machielse agreed that the diversity in standards is not as much of a problem as the diversity in implementations. “This is due to the regulation itself RTS requires the banks to mirror their online banking environment. There has never been a harmonisation of banking environments - with thousands of banks come thousands of systems and infrastructures. This is a big part of the reason why we see so much fragmentation.” Despite this, the possibility of a PSD3, or a mandated single standard for Open Banking APIs, was not seen by speakers as a necessary step - unless PSD2 fails to deliver what the regulators set out to achieve. Even then, there was a strong view that the industry needs to focus on making sure that Open Banking works by improving the performance of APIs, growing the ecosystem and driving customer adoption. Beyond that, changes should be market-driven, based on feedback from PSD2, not prescribed by regulators. In the meantime, the market needs to be left to breathe. ■ 41

Planet of the APIs Digital banks in the new FS ecosystem Technology and regulatory changes have created massive disruption in the banking sector, enabling fintech startups to gain market share by delivering convenient and innovative customer experiences.

Payments issuing

Most incumbents have eventually managed to play catchup and are now engaging with their customers through a range of digital channels, but the transformation journey is far from complete and customers have already moved on. We now live in an integrated economy and customers increasingly expect a proposition from their banks that is embedded within the pervasive digital platforms. While this initial digitisation of services will deliver value for the next five years, banks need to be planning for the next wave of disruption enabled by Open Banking. In this new Digital Ecosystem Banking environment, ‘banking as a platform’ will become the pervasive model, giving customers easy access to a range of digital, data-led products and services. To stay relevant, FS providers will need to manage an interconnected system of cloud-based apps and APIs that enable different digital systems to communicate seamlessly with one another. New digital revenue streams This transformation of the existing business model obviously creates a number of major challenges, as few banks are in a position to operate such an ecosystem at scale. They will need to build new digital architecture and innovative products, while keeping a close eye on risk management and security. But if FS providers embrace the new Digital Ecosystem Banking model they can look to take advantage of new revenue opportunities alongside accelerated cost reduction. For example, Ecosystem Banking will enable a new ‘marketplace’ model whereby banks can broaden their proposition to customers by effectively distributing third-party products and services via their own platform. On the flip side, banks will be able to use their APIs to extend their reach beyond their existing customer base, perhaps offering products such as travel money or loans to established digital marketplaces in the banking ecosystem.

Rewards & cashback

Loyalty & receipts

APIs

APIs APIs

New digital bank

APIs APIs

APIs

Online accounting

Savings & investments

ISAs and investments

How to build a digital bank This might sound like it’s still a few years away from becoming a reality, but at PwC we’ve already built a digital bank using only APIs and the cloud. It’s a proof of concept that serves to underline the urgency of the situation for banks that aren’t yet planning for a future as part of the new digital ecosystem. At the Open Banking Expo in November, PwC director Mike Kennelly will demo our digital bank of the future and show why integration into an Ecosystem Banking model is essential if FS providers are going to survive the ongoing disruption in their sector. Mike will also explain why the barriers to entry in this new interconnected system are going to be cultural as well as technical. It requires a complete shift in mindset to a model where FS providers understand their role within the ecosystem and accept that their propositions will be stronger if they collaborate with partners across different digital marketplaces. The winners will be those who understand that the time to act is now.

pwc.co.uk This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. © 2019 PricewaterhouseCoopers LLP. All rights reserved.

Insight Faith Reynolds Independent Consumer Representative for Open Banking Implementation Entity

“The latest OBIE figures (Sept 2019) suggest there are 180 registered firms on the directory with around 53 live with at least one customer-facing service.”

e’re nearing the end of 2019 and it’s been a busy year. Among other things, app-to-app is fast becoming the most popular way to authenticate; the Open Banking Implementation Entity (OBIE) has released and revised its Customer Experience and Operational Guidelines; and the PSD2 deadline for Secure Customer Authentication has been and gone, the cliff-edge dealt with, at least for now… here’s hoping everyone is ready in time for March 2020. Meanwhile, OBIE is consulting on a new Customer Evaluation Framework. The Personal Finance Research Centre at the University of Bristol has been drafted in to look at how OBIE might measure the impact of Open Banking on consumers. Key aspects include awareness, trust in and adoption of Open Banking-enabled products. The latest OBIE figures (Sept 2019) suggest there are 180 registered firms on the directory with around 53 live with at least one customer-facing service. Our analysis earlier this year shows consumers need Open Banking more than ever. Getting a better deal on your current account is one of the highest drivers of value for consumers but there are still limited products which offer personalised switching, or alternative ‘unbundled products’ such as third party overdrafts and products that sweep your high balance to an interest-bearing account. Variable Recurring Payments (VRPs) are a key facilitating API for these products. They enable third parties to initiate a payment when certain conditions agreed upfront by the

consumer are met, without requiring authentication for subsequent payments. For instance, a threshold for surplus funds in an account is identified, so money is automatically moved to a savings account. This type of payment arrangement is important for the success of around 38 per cent of the consumer value from Open Banking, based on the analysis undertaken for our report on the Consumer Priorities for Open Banking earlier this year. Soon we should get news on how VRPs have fared in the FCA’s Sandbox, which they joined in April. Getting the consumer protection right will be key to their success. Meeting people’s needs requires much more than facilitating technology. Propositions need to be enticing. Alongside the technical challenges of creating the kind of smart, intuitive and convenient products consumers really want, firms need access to data to train their algos, sufficient funding and a basic business model to get it off the ground (among other things). Even then, a great product can fail if consumers aren’t aware it’s there for the taking. APIs are just one piece of a bigger jigsaw. Growing the market for Open Banking-enabled products requires sustained investment in innovation. Sandboxes, hackathons, incubators and accelerators play a vital role in stimulating the market to action and in ensuring that what eventually gets to market is also good for consumers. Initiatives like Finance Innovation Lab’s fellowship programme are helping entrepreneurs piece together

the whole jigsaw needed to make Open Banking a reality. The Lab recently celebrated a Demo Day at the end of its 2010-2019 fellowship. It has had a great cohort of fellows supporting financial well-being, sustainable living and alternative currencies. One notable initiative is Mortar, which uses data to improve the relationship between landlords and tenants. It aims to offer jam-jarring accounts and swift referral for debt advice alongside supporting ‘rentflex’ with the Centre for Responsible Credit. Rentflex helps people underpay and overpay on their rent to suit their circumstances and avoid arrears. Many private landlords provide informal flexibility for tenants. Digitisation threatens to remove this, so Mortar are thinking about how they can build in flexibility in a way which supports tenants and respects landlords. As the new year starts, I am super excited to see NESTA and OBIE’s Open Up Challenge 2020 kick off. OU2020 is a £1.5m prize fund to unlock the power of Open Banking for UK consumers. Alongside grants, finalists will also feature in a prominent national digital marketing campaign. As a judge for the initiative, selecting the finalists has been inspiring. Open Banking is still in its infancy and has so much potential. I can’t wait to see where we are this time next year. ■

➽ If you would like to comment on this opinion piece, please email us at: editorial@openbankingexpo.com 43

F E AT U R E / F I N T E C H

Failing fintechs: Survival of the Fittest? Hundreds of fintechs have arrived on the Open Banking scene in recent years, but history hasn’t been kind to fintechs, with the vast majority destined to fail – how do they handle the challenges? Jennifer Turton reports

ny start-up company has to find the right balance between short-term priorities and long-term strategy. Fintech start-ups are no different. Those in the business say the current climate is all about longevity of funding. Put simply, those who have great ideas and backers with deep pockets will be the most likely to succeed. While this may seem self-explanatory, the demands of private equity backers can create a conflict between achieving shortterm milestones and executing long-term product strategies. Michael James, head of technical architecture at financial services software business Altus, likens this to BBC TV programme Dragons’ Den. “Fintech companies often look to the outside world for funding in exactly this way, albeit not on camera,” he says. ›

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Oct/Nov 2019

FINTECH

F E AT U R E / F I N T E C H

› “They will likely meet potential investors on a one-to-one basis hoping to secure the funding they need to deliver their world-beating idea and make everyone rich. Unfortunately, most corporate investors will have standard due diligence hurdles for any significant investments which many start-ups will fail to clear – policies, contracts, clients, commercials can all trip up business founders who have been entirely focused on the proposition they want to build rather than the mechanics of the business.” James argues that, for that reason, the most popular method of funding start-ups is for the founder to invest their own money. “For the serial entrepreneur this may have come from the sale of a previous business or, if it’s their first attempt,

perhaps from a redundancy package, having worked for one of the larger financial services firms for many years,” he says. “This kind of boot-strapping may be enough to get the business off the ground but often not to reach profitability – the cost of customer acquisition can be punishingly high in financial services.” This is where private equity or venture capital firms come in: businesses with cash to invest, looking to improve the prospects of a struggling firm with a great idea. James cites Nutmeg as one highprofile example that has gone through multiple rounds of funding, but is yet to make a profit. “It is tempting to assume that the expert asset managers who have injected cash on more than one occasion see a long-term trend which amateur investors have missed but there may be another explanation,” he says. “A colleague recently told me of an investor friend who will make five investments on the basis three will 46 O P E N B A N K I N G E X P O . C O M

Fintech companies often look to the outside world for funding in exactly this way, albeit not on camera. Michael James Head of Technical Architecture, Altus

fail, one will remain on life support for the foreseeable future but the fifth will make them a fortune. If corporate investors operate on this basis, then Nutmeg (and many more fintechs like them) could simply be a casualty of statistics.” Venturing beyond Oliver Charlton, a consultant at Tori Global, explains that fintech has received the most investment over the past five years of all start-up sectors, with the source of funding primarily venture capital firms. However, he suggests a growing percentage of investment is coming from the crowdfunding community and argues that this has several benefits over the traditional venture capital route. “Firstly, before even launching a product, a firm can build a community of investors who (hopefully) will evangelise the product and act as a sounding board during product development,” he says. “Secondly, it grants the firm raising capital a degree of autonomy that they might not get with a venture capital firm. Venture capitalists often require positions on the boards of their portfolio firms, so crowdfunding can be a better option for the more free-spirited founders.” Charlton adds that, while investment in fintechs has been rising, this pattern fits the wider trend of increased investment in start-ups across the board. “This is partly due to historically low interest rates, which translates to cheap money and growing interest in alternative investment strategies. [It] has resulted in a swelling of the number of venture capital funds, as well as an increase in the size of funds, in terms of assets under management,” he says.

There is a degree of variation in the type of investors in fintechs depending on what stage the company is at, but also the manner in which it is invested (either directly or indirectly). In what is increasingly seen as a status symbol, Charlton argues, angel investors and seed-funding are often supplied directly by high net worth individuals. “As the company gets off the ground, the likes of family offices and incubators start to take an interest, and this can be done through a combination of direct and indirect channels,” he says, adding that this was demonstrated by Y-Combinators’ £113m investment in Monzo. However, what makes a challenger stand out from the crowd, particularly when it comes to seeking investment, differs depending on the stage they are at.

Oct/Nov 2019

FINTECH

Quite simply, the lack of data makes it harder to crunch the numbers of early-stage challengers, so more heuristic methods are employed. Oliver Charlton Consultant, Tori Global

Charlton explains: “At angel and seed level, the emphasis is less on financial analysis, although this becomes increasingly important as the company seeks to raise more substantial levels of capital. For fledgling companies, the analysis really focuses on the leadership team, the idea itself and the addressable market. “Quite simply, the lack of data makes it harder to crunch the numbers of early-stage challengers, so more heuristic methods are employed. Ten is often the magic number when it comes to choosing a successful challenger: if the product or service is ten times better than its competitors, then it could be a winner. “Additionally, the rule-ofthumb for venture capitalists is that an exit event for a portfolio company

must deliver roughly ten times the amount invested in order for the fund to be profitable.” Funding winners The Business Competition Remedies Scheme has also recently assisted in funding a handful of fintech firms. In Pool D of the £775m scheme, where the focus has shifted to the commercialisation of fintech, Codat, Fluidly, Form3, Funding Options and Swoop Finance were all given £5m. Daniel Meere, UK managing director of global financial services consultancy Axis Corporate, says: “This is a clear message for all fintechs which applied to continue with their expansion plans, building capabilities and development of their product road maps. The commercialisation of fintech is not going away and Pool A and B winners are already scanning the market for fintech partnerships to help them serve the SME market through their funding awards or future expansion plans.” Turning to those securing funding from Pool D, Meere explains that they continue the approach set out by ClearBank in the Pool A announcements, aimed at connecting providers and providing elements of utility banking offering. He says: “Fluidly, for example, aims to unlock financial data for SMEs and transform how businesses manage their finances, while bringing together the wider banking and fintech ecosystems. This is welcome to the sector overall and is a positive step in enabling and commercialising innovative technology for use by banks in the delivery of their services to SMEs.

“Codat capitalises on the need for integration and the challenges faced by banks in linking the new applications that they need with the legacy technology that they are saddled with. Specifically targeting the accounting packages, and the need for SMEs to connect these to their banking applications to enable more accurate credit scoring, better flow of information and more seamless business management, its solution has been welcomed by many banks as a core offering already.” Succeeding, however, is made up of more than just investment. The nature of the financial services industry means timely legal advice about strategy can be the difference between success and failure.

David Gardner, partner at UK law firm TLT, explains: “Early stage fintechs commonly need to establish relationships with multiple parties and consider the application of complex regulations at the outset of their growth journey. “For start-ups, limited time, resources and finance mean it is important to be able to separate the wood from the trees and focus on key issues. Launching a successful fintech business involves navigating an alphabet soup of regulation and compliance requirements – PSD2, SMCR, GDPR, EBA requirements on outsourcing and Cloud, and so on. If it doesn’t apply to you, it probably will apply to your customers, suppliers or partners.” He says these firms need to navigate legal, commercial and regulatory issues that are often unique to this sector. “A fintech that is set up from the outset with a clear and credible position on these issues will be far better prepared for due diligence from would-be investors or acquirers.”■ 47

ADVERTORIAL

Jack Price Managing Director, Computershare Communication Services UK

Debt in the digital age Collecting debts and offering customer debt advice in traditional ways won’t meet customer expectations, says Computershare Communication Services. Customers’ expectations are changing – they want flexibility and convenience from the organisations they choose to work with; and this is no different when it comes to managing debt. With a wide range of engaging communication channels, a clear understanding of the journey from a customer’s perspective and introduction of new technology such as Open Banking, we have the opportunity to enhance and improve what can typically be a long and challenging journey for the customer in clearing debt. We also have the opportunity to make the entire process much easier for creditors, advisors and customers. There is clear evidence to suggest a growing appetite for customers to transact in real time and to self-serve: SuperOffice found that 70 per cent of consumers expect a business to provide self-service facilities and 40 per cent state they would prefer self-service over dealing with a representative. In 2018, StepChange debt charity saw more than 60 per cent of new clients complete debt advice through their digital channel whilst just under 40 per cent contacted the charity through their telephone service. Despite this, it is evident that many organisations are still relying on a traditional debt collection journey with outdated communications and manual, telephone-based

48 O P E N B A N K I N G E X P O . C O M

processes to assess affordability. To solve this problem we must understand the customer needs and expectations in order to meet their requirements, whilst not just looking to technology as the solution. Open Banking and other technologies provide us with an opportunity to reimagine how we deal with customers to get the best outcomes for them and the lender; but they are not the solution in their own right. We must look at the journey holistically in order to understand where and when technology can create the right outcomes. Doing this could not only make the process of assessing affordability much easier for the creditor, advisor and customer, but also offer the opportunity to engage with customers earlier to prevent them from needing to reorganise their debt in the first place. Organisations that take the customer-first approach to the whole debt process are the companies that are likely to see significant customer experience improvements. This leads to reduced debt and higher customer satisfaction scores. However, this is easier said than done. Many organisations either struggle to know where to start with designing a customer journey, or cannot implement new technology solutions such as Open Banking, leaving them with poor customer experiences or high technology costs. Computershare Communication Services can help you better understand your customers, design a customerfirst experience and provide the technology and services you need in order to successfully interact with your customers in the way they expect. To find out how we can help, get in touch today. ■

Oct/Nov 2019

Insight Jim Wandsworth SVP Open Banking, Mastercard

“Dispute resolution is another key concern. By working with a large number of industry participants, we have been able to develop a rule set to help resolve problems that will inevitability arise.”

For Open Banking to flourish there needs to be a fundamental shift in the market, but I am confident that it will happen. Open Banking is not just regulation – it’s the potential for a global movement. It has the power to not only fundamentally change the way we manage our finances as consumers and businesses, but the way people transact with one another on a global scale. The UK is a trailblazer and Europe is next as financial institutions ensure PSD2 requirements are met. Open Banking brings responsibilities and risk. These present innovators with opportunities to create bold and brave solutions. We recognise the major role we can play in facilitating trust and connectivity by providing what we hope will become a global standard Application Programming Interface (API) set. Mastercard is able to curate new commercial relationships between counterparts, third parties and banks, even when they are geographically distant. The scope to create ground-breaking services and products has no limits. It’s not the data or the underlying technology that’s important, it’s how it is implemented through smart and intelligent analytics to create painless, hassle-free solutions that reimagine how we transact. We’re already seeing them come to the market, for example with Coconut and Tully. Account aggregation services are a logical starting point and most banks are working on delivering these now.

However, this is just the beginning as consumers constantly demand more tech-driven solutions. Perceived value and trust will drive sign-up. There has been speculation that sharing financial data will be a barrier. But if you present a consumer or a business with a product or service that delivers sufficient value, they won’t think twice. The millennial generation and Gen Z, important groups for Open Banking adoption, are generally comfortable with the concept of sharing data when it’s shared for benefit. After all, people’s most intimate thoughts and experiences are shared across social media or we happily buy and pay using Amazon’s one-click. Problems will be solved by established, trusted providers. It’s not just consumers and businesses who need to be comfortable with the concept of their data being shared, but also the banking sector – opening up bank account data to third parties is a huge shift for the traditional sector. And when PSD2 takes full effect, there’s going to be a host of European third parties entering the market – reporting to several different regulators. With connectivity the foundation of Open Banking, third parties and banks are going to need to find ways to interact successfully. Quality infrastructure is a major consideration for the industry, which is one of the reasons we created ‘Open Banking Connect’ – a single connection to multiple financial institutions’ Open Banking interfaces.

Mastercard is also working with multiple banks to help prevent fraud through building a wider view than is possible for any one bank. Dispute resolution is another key concern. By working with a large number of industry participants, we have been able to develop a rule set to help resolve problems that will inevitability arise. Open Banking will succeed if the industry is given time to develop – the innovators need space and opportunity within the new regulatory framework. As the momentum grows, we’ll see the full impact of Open Banking; new collaborations between unlikely partners, banks delivering increasingly innovative products and services, new industries coming onboard as they realise the value in underlying data. For banks, collaborations with credible organisations will free up in-house development teams to develop innovative customer-centric solutions. We all have a part to play by pushing at the boundaries of creativity to ensure Open Banking is a success. Currently there are no real firstmovers with dominating market positions. It’s still all to play for; from fintech start-ups to household retail banking names. ■

Global payments business Mastercard is developing applications and services to underpin, enable and safeguard the Open Banking ecosystem. 49

Hub

The Open Banking & PSD2 Hub Global industry expertise facilitating the Open Banking ecosystem

Email: dennis.collet@bjss.com Company: BJSS

Telephone: +44 7894 230895

Contact: Dennis Collet

Website: bjss.com

BJSSS, the UK’s leading privately-owned IT & Business Consultancy. Winner of a Queens Award for Enterprise Agile, we work with major organisations, delivering IT solutions that millions of people use every day. BJSS delivers end to end solutions – from Design & Concept, Business Strategy & Product Development to IT delivery & implementation. Open Banking standards provide the platform to develop groundbreaking propositions for banks. BJSS can help drive value from these propositions harvesting consumers’ vast appetite for more convenience. BJSS Business Consulting highly experienced & skilled industry experts who are pragmatists & innovators who work at the intersection between technology & business.

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.

50 O P E N B A N K I N G E X P O . C O M

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

Oct/Nov 2019

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

Hub

The Open Banking & PSD2 Hub Global industry expertise facilitating the Open Banking ecosystem

Email: robert.mckechnie@equifax.com Company: Equifax

Telephone: +44 7973 713723

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.

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.

Email: aurelie.dousset@experian.com Company: Experian

Telephone: +31 70 440 4000

Contact: Aurelie Dousset

Website: experianplc.com

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.

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Secure API Connection

Cloud Exchange

Interconnection

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

Oct/Nov 2019

Hub

Want to see your company listed here? Contact Adam at adam.cox@openbankingexpo.com or call +44 20 7993 5159

Email: info@fintechnorth.co.uk Company: FinTech North

Telephone: +44 113 834 3133

Contact: Julian Wells

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 30 events attracting over 3300 delegate registrations from over 600 different companies, with speakers drawn from 20 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.

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.

Regional FinTech

FinTech events

FinTech community

PSD2 Accelerator

Open Banking Platform

API Management

Credit Risk

Decision Engine

Open Banking

Hub

The Open Banking & PSD2 Hub Global industry expertise facilitating the Open Banking ecosystem

Company: Modulr

Email: cerys.thompsaon @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.

Automate pay out

Simplify pay in

Deliver new services

Email: presse@ndgit.com Company: NDGIT

Telephone: +49 89/99 82 413–11

Contact: Stefanie Milcke

Website: ndgit.com

NDGIT stands for Next Digital Banking. The company provides a proven API platform for banking and insurance. Connecting banks and fintechs with digital ecosystems, its technology opens banks up to digital partners with Open Banking APIs and PSD2 solutions. The NDGIT fintech platform forms a technological backbone for new applications and IT landscapes in banking and insurance. NDGIT implemented Switzerland’s first open banking solution in 2017 and was awarded the Euro Finance Tech Award 2017 for the best collaboration between bank and fintech. 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 7984 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.

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Open Banking Platform

World leading technology provider for bank’s connection

Trusted by 30 well-known banks

Income and Expenditure

Transaction categorisation

API

Oct/Nov 2019

Want to see your company listed here? Contact Adam at adam.cox@openbankingexpo.com or call +44 20 7993 5159

Email: sales@pingidentity.com Company: Ping Identity

Telephone: +44 207 190 9105

Contact: Andrea de Martin

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.

Secure access to accounts (XS2A)

Strong customer authentication (SCA)

Consent management

Email: europe@plaid.com Company: Plaid

Website: plaid.com

API

Contact: Keith Grose Plaid is a technology platform and data network that enables applications to connect with usersâ&#x20AC;&#x2122; 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 North America and Europe.

PSD2 compliance

API Transaction categorization

Email: hello@reflow.zone Company: reflow

Telephone: +44 7466 610088

Contact: Manish Garg

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.

Instant Payments

Data Insights

Request to Pay

Hub

The Open Banking & PSD2 Hub Global industry expertise facilitating the Open Banking ecosystem

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’).

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@callcreditgroup.com Company: TransUnion

Telephone: +44 7802 799501

Contact: David Firth

Website: transunion.com/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.

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Open Banking and cash management app

Built-in cash flow forecasting capability included Free to download on iPad and iPhone from the App Store

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

Oct/Nov 2019

Want to see your company listed here? Contact Adam at adam.cox@openbankingexpo.com or call +44 20 7993 5159

COMMERCIAL CLARITY

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. Whitecapâ&#x20AC;&#x2122;s clients have included banks, building societies, technology providers, outsourced service providers, FinTechs, retailers, universities.

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 a scalable, open API to simplify connectivity to power and monitor the most demanding applications. By equipping every developer with a valuable toolkit, Yapily empowers users to build, connect and monitor their own APIâ&#x20AC;&#x2122;s for communication within minutes. Yapily is the only technology provider to join the Technical Design Authority (TDA) with the Open Banking Implementation Entity (OBIE).

FinTech strategy consulting

Open Banking opportunity mapping

FinTech partnership strategy

API for Key Performance Metrics

API for Enriched Customer Experience

API for Secure, Low-Cost Payments

Want to see your company listed here? Contact Adam at adam.cox@openbankingexpo.com or call +44 20 7993 5159 57

THE LAST WORD

Endless possibilities A Ten Year Outlook Adedeji Olowe Trustee, Open Banking Nigeria

redicting the future has never been more accurate than asking a thousand monkeys at keyboards to create a New York Times bestseller. Nevertheless, industry experts are convinced that Open Banking technology will be transformational for banking services in the near future. What could be driving such a confident posture in the face of future uncertainties? There are many reasons for this assurance. The trend of technology changes and adoption over the last few years offers clear indications. It does not take a soothsayer to extrapolate the direction and impact of change. Application programming interfaces (APIs) have become the foundation of our modern world. APIs are the glue that holds together the platforms and services which provide us with information, services and products. For example, at any given moment, billions of smart phones are making trillions of API calls with servers and services scattered across the globe. While many cannot imagine our world without social media, none of that is possible without APIs. During the early years of smart phones, the meme was, “there’s an app for that,” now there’s an API for practically anything one would like to do. From finding the temperature, to image recognition, instant audio language translation, and finding the price and location of anything. Standardisation of APIs, following the success of open source software, has been a major boost. Standards have been the unsung heroes of progress. Standardised APIs help young developers in Mumbai, India, to consume APIs made by unseen start-ups in San Francisco, USA, in order to serve customers in Accra Ghana. Banks have been largely immune to the global standardisation of APIs because of their regulated nature, multitude of regulators, and catastrophic impact should such API standards have security or efficiency gaps.

Nevertheless, the holdout continues to shrink every day as more and more countries look at the development and adoption of Open Banking. The United Kingdom is the pacesetter within the global Open Banking industry, but other countries are rapidly moving up. According to Ismail Chaib, CEO of software company Tesobe, as of Q2 2019, about 47 countries are at different stages of their Open Banking journey. Nigeria currently leads Africa, as the only African country with a defined Open Banking implementation roadmap. Following the adoption trend, we believe that Open Banking APIs will have a significant transformational impact on society, probably more than the world wide web. The benefits of Open Banking have been expounded by many different experts. However, where the impact could be most disruptive is in the ability to integrate digital payments into the fabric of everyday life. Micropayment is where small amounts, sometimes as small as $0.01, are paid for small services or products. While the world has clamored for this, unfortunately, micropayment hasn’t materialised because integration and transactional cost have largely made it a pipe dream. However, with Open Banking, connecting games, social media, digital marketing, in-app purchases and even devices into the global payments fabric could change the payments arena as we know it. Coupled with IoT, facial recognition and AI, payments could be made in moments for minute amounts. Access to credit is a significant challenge in the less developed parts of the world. Countries such as Nigeria, where a $30bn credit gap to individuals remains largely untapped, could be completely transformed with retail loans. With open APIs, credit scoring would be automated and banks and lenders would be able to provide credit in seconds. As smart phones become cheaper, financial exclusion may become a thing of the past. Open Banking could enable instant account opening. This would allow banking to become a service in which nobody would care where an account is ‘stored’ as banking relationships become transactional and providers irrelevant. The world could become a different place, and Open Banking will cease to be part of our lexicon as it fades into the background, driving the next boom of growth and prosperity. ■

“Access to credit is a significant challenge in the less developed parts of the world. Countries such as Nigeria, where a $30bn credit gap to Banking Nigeria is an Open Banking initiative that individuals remains largely untapped, could Open works with partners to build API standards for the Nigerian be completely transformed with retail loans.” banking and financial industry. 58 O P E N B A N K I N G E X P O . C O M

Oct/Nov 2019