Open Banking Expo Magazine Issue 4

OPEN BANKING EXPO IDEAS, CONNECTIONS AND DEALS IN OPEN BANKING

Issue 4_Aug/Sept 2019 OPENBANKINGEXPO.COM

THE BEST OF EUROPE PAGE

16

INNOVATION LAG Breakfast briefing speakers debate sector progress

SME PROMISE Underserved and undervalued - it’s time for change

CANADA’S JOURNEY The financial sector takes steps towards Open Banking

THE BIG INTERVIEW ING head of transaction services on total transformation

Truth through insight.

Trust through delivery. bjssbusinessconsulting.com

Editorial

PUBLISHER’S WELCOME

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

Perhaps the biggest news this summer was from the UK’s Financial Conduct Authority, which agreed to delay EUmandated SCA payments regulations by more than 18 months, after warnings that the rules would strongly affect online sales.

As I write, the UK’s Open Banking Implementation Entity (OBIE) is about to release Version 3 of the Open Banking Standards, including Customer Experience Guidelines. The retail banking market has come a long way since the OBIE was established in September 2016, though most would argue there is a lot more to come to truly stimulate innovation and create more competition.

Other regions are on the beginning of their journeys, and we are excited to launch Open Banking Expo Europe in Amsterdam this October. With C-level speakers from the likes of ING, Rabobank, Klarna Bank and Danske Bank discussing their initial strategies, plus regulators and associations including OBIE, STET, The Berlin Group and the Polish Bank Association considering if Open Banking can take off with multiple standards, the event is geared up for some eye-opening discussions. You can read quick-fire interviews with some of our speakers on pp34-35.

Before then, we touch down in Toronto this September to host Open Banking: A Canadian Lens. The region has an Open Banking government consultation underway and Open Banking is a hot topic amongst banks, credit unions and fintechs. We look forward to meeting our friends across the pond, and for a taster of what the agenda has on offer,

turn to the event preview on pp21-25.

To celebrate our European event launch, we take a look in this issue at which countries are home to the most compelling commercial launches and how EU-wide regulatory changes are influencing development at country level (pp16-18).

We also interviewed ING’s head of transaction services Mark Buitenhek, as the bank has been well-publicised for its speed of Open Banking adoption.

Buitenhek started in the business more than 30 years ago, read what he has to say on pp14-15.

Perhaps the biggest news this summer (p6) was from the UK’s Financial Conduct Authority, which agreed to delay EU-mandated SCA payments regulations by more than 18 months, after warnings that the rules would strongly affect online sales. Will more countries follow suit? We will see.

The summer also saw Open Banking Expo host its first breakfast briefing, which included the latest regulatory update from the OBIE, alongside senior executives from HSBC, Citi and Tandem Bank who discussed their latest strategies, partnerships and predictions. You can read the write up on pp28-29.

Enjoy the issue!

PS: We’ve launched our London agenda. With five stages this year, including new mortgages and payments streams, pop 13 November in your diary.

Visit www.openbankingexpo.com/london for more information.

03

Editorial

CONTENTS I s s ue 4 _ A u g /S ep t 2 0 1 9

Regulars

06 News The latest industry news: City watchdog pushes back SCA deadline; Treasury confirms affordable credit plan; retailers to ‘defy’ PSD2; Experian data requests soar.

Cover Story

16 THE BEST OF EUROPE We take a look at the most compelling commercial launches across Europe and consider how EU-wide regulatory changes are influencing development at country level.

Ellie Duncan reports

Insights 27 38 39

Features

Jennifer Reynolds, Toronto Finance International Faith Reynolds Todd Clyde, Token

21 Canada Event Preview Discover how Open Banking could transform Canada’s financial landscape in our sneak preview of Open Banking Expo’s September event in Toronto.

26 View from the Top

Huw Davies: The OBIE’s Head of Premium APIs on bank opportunities.

40 Global Spotlight

Steve Weston: the founder and CEO of Volt on progress in Australia.

28 28 Equinix Briefing At the Open Banking Expo Magazine July breakfast briefing, panellists discussed how to tackle the lack of true innovation in the fledgling Open Banking sector.

41 SME Focus

Richard Kerton: Esme Loans’ CEO and co-founder explores what will transform the SME lending space.

42 Open Banking & PSD2 Hub

30 A shot in the

Your directory of leading suppliers in the market.

arm for business

For years SMEs have felt underserved and undervalued by their banks, but that is about to change, reports Jennifer Turton.

50 The Last Word

Steve Kirsch: the Token founder shares his ten-year vision for Open Banking.

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

30 Aug/Sept 2019

Editorial

The Big Interview

14 Mark Buitenhek Head of Transaction Services, ING While some banks have barely dipped a toe in the Open Banking pond, ING has jumped in and is changing its entire operation in anticipation of the future, finds Joe McGrath.

We embrace an open platform strategy.

Having Open Banking capabilities or APIbased capabilities is the only way forward.

34 60 Second interview Speakers for the upcoming Open Banking Expo Europe event in Amsterdam in October give their views on the challenges and innovations ahead for the Open Banking sector.

34

CO N TR I B U T O R S

E dit oria 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 4_Aug/Sept 2019 OPENBANKINGEXPO.COM

THE BEST OF EUROPE PAGE

16

INNOVATION LAG

SME PROMISE

CANADA’S JOURNEY

THE BIG INTERVIEW

Breakfast briefing speakers debate sector progress

Underserved and undervalued - it’s time for change

The financial sector takes steps towards Open Banking

ING head of transaction services on total transformation

05

News

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

City watchdog pushes back SCA deadline

T

he UK’s financial watchdog has announced an 18-month delay to the introduction of Secure Customer Authentication (SCA) to give firms more time to prepare.

From 14 September 2019, new European Union rules come into force that impact the way in which banks or payment services providers verify their customers’ identity and validate specific payment instructions.

The SCA rules are intended to enhance the security of payments and limit fraud by requiring online payments above 30 euro to be authenticated through two elements based on something customers know, are or have. These include passwords, fingerprints or facial identification, and devices such as tablets or phones.

The Financial Conduct Authority (FCA) said card issuers, payments firms and online retailers will now not be penalised immediately after the September deadline, providing they can demonstrate they have taken the necessary steps to comply with the plan.

The announcement reflects the recent opinion of the European Banking Authority that more time

was needed to implement SCA given the complexity of the requirements, a lack of preparedness and the potential for impact on consumers.

Jonathan Davidson, executive director for supervision – retail and authorisations at the FCA, said the regulator has been working with the industry to put in place stronger means to stop fraud.

He added: “While these measures will reduce fraud, we want to make sure that they won’t cause material disruption to consumers, so we have agreed a phased plan for their timely introduction.”

At the end of the 18-month period, the FCA expects all firms to have made the necessary changes and undertaken the required testing to apply SCA. Jason Tooley, chief revenue officer at biometrics authentication firm Veridium, said the delay is disappointing.

“Financial institutions and payment service providers have had nearly two years to prepare since the initial

announcement, and there is no valid excuse for the delay in its enforcement apart from an unwillingness to participate,” he said.

“It would be interesting to understand the prioritisation of PSD2 strong customer authentication as I’m aware that a number of financial services organisations viewed this as a business differentiator.

“While it is true that consumers will see minor changes to their day-to-day spending, the additional layer of security on higher value payments will enable consumers to benefit from safer and more innovative electronic payment services.”

Tooley said there are technologies in the market which could alleviate the challenges posed by the regulation.

“Strong Customer Authentication will mean consumers are more confident when buying online – not act as a deterrent to sales, as some have incorrectly suggested,” he said.

While these measures will reduce fraud, we want to make sure they won’t cause material disruption to consumers, so we have agreed a phased plan.

HM Treasury confirms affordable credit programme The UK’s Treasury has joined forces with an innovation foundation to make affordable credit accessible to a broader UK market, offering £2m in development grants.

The government has created a partnership with Nesta Challenges, a charitable foundation that works with policymakers to make markets more open and competitive, to launch the Affordable Credit Challenge.

The aim is to encourage fintechs to forge partnerships with community lenders to widen access to affordable 06 O P E N B A N K I N G E X P O . C O M

credit for consumers with few products and services to choose from.

The Affordable Credit Challenge will support partnerships seeking to create innovative technology solutions to increase this access. As part of the initiative, a £2m pot of development grants will be made available to six partnerships working on solutions with the biggest impact. Three of the partnerships will then win cash prizes in the spring of 2020.

To coincide with the launch, the Treasury published a study showing

that half of those who borrowed from high-cost lenders struggled to repay the loan on time and a similar proportion (49 per cent) had to borrow more to pay it back.

Economic secretary John Glen said: “Millions of people struggle to access fair and affordable credit. I want to see more people benefit from the transformative power of digital technology, which is why we have launched the Affordable Credit Challenge. This is a vital opportunity for fintechs to work with community leaders to give more people control over their money.”

Aug/Sept 2019

News

Experian data share requests soar Credit bureau Experian is handling more than 20 million Open Banking data sharing requests a month.

The firm’s open data platform processed 40 per cent of the UK’s 49.1 million API (Application Programming Interface) requests made in April, figures from the Open Banking Implementation Entity (OBIE) reveal.

The number of API requests in the UK has more than doubled since February.

Experian expects even further growth and said its May figures will show it handled about 25 per cent more API requests month-on-month.

The company said its technology has allowed credit card and auto finance providers, rental property agencies, mortgage lenders and gaming companies to better assess whether services are affordable for their customers.

In the future, Experian expects Open Banking data to be used alongside an applicant’s credit history to offer lenders a positive view of an applicant’s income and expenditure as part of their financial track record.

“The statistics show more people are using Open Banking services as

part of their everyday lives, but this is just the start,” said Lisa Fretwell, managing director of data services at Experian.

“We’re making significant investments in open data technology, so people can use their information to access improved services which are tailored to their needs. It’s these enhanced capabilities, combining consumer contributed data with other sources, such as the credit bureau – which will allow companies to interact with people in new and more meaningful ways.”

Imran Gulamhuseinwala OBE, trustee of the OBIE, added: “Helping people and businesses to understand the value of their data and realise the benefits is instrumental in really driving Open Banking to become more commonplace, ultimately delivering better and quicker outcomes for how people can move, manage and make more of their money.”

Fintechs picked for Latin America trade mission in Mexico City

QUOTE OF THE MONTH

Real innovation will come when we allow people to interact with their money Paul Clark

Helping people and businesses to understand the value of their data and realise the benefits is instrumental in really driving Open Banking to become more commonplace, ultimately delivering better and quicker outcomes for how people can move, manage and make more of their money.

Chief Technology Officer, Tandem Bank

Six UK fintechs have been chosen by the Government’s Department for International Trade (DIT) for the third trade mission to Mexico City.

Firms who made the cut include; Boseman, Comply Advantage, Duesday, Tokenise, Paymentology and Rhisco Solutions.

As the fintech scene continues to grow in the region, this is another step towards global Open Banking unification.

Liz Truss, Secretary of State for International Trade, highlighted that the companies chosen for this year’s trade mission are worldleading in the fintech sector, and attract the highest levels of capital in Europe. “Whether it’s our comprehensive State of the Nation report, partnerships with FinTech Alliance, or the launch of our new Pilot Bridge Programs, DIT continues to be a firm ally to the UK’s fintech industry.

Imran Gulamhuseinwala OBE Trustee of the OBIE

Quarter of online retailers will ‘defy’ PSD2 rules A Mastercard survey has found that 24 per cent of online retailers have no intention of supporting new customer authentication rules coming in under the PSD2 directive.

The second Payment Services Directive regulation (PSD2), which represents a generational change for European banks and retailers, includes strong customer authentication (SCA) requirements, a set of rules payment services providers will have to apply to online purchases.

SOUND BITE

These particular requirements have caused mass uncertainty among firms over how they can be sure their processes are SCA-compliant.

The Mastercard survey of online merchants unearths more issues, showing that while some will just ignore the requirements, only 25 per cent were ever aware of them.

In an SCA compliance analysis, John Bennett, vice president of operations and corporate development at Signifyd, the fraud protection firm, said: “The

truth is, leveraging the three elements of SCA is an effective safeguard against fraud.

“Requiring authentication based on something the consumer is, something the consumer alone knows and something the consumer possesses, is a robust and secure method.”

The legal deadline to comply with the technical standards of SCA is 14 September 2019, but the Financial Conduct Authority has said it will work with the industry to help firms implement SCA for card payments in e-commerce as soon as possible after this date.

07

News

Cash no longer king in Portugal

Electronic payments will surpass cash in Portugal within the next 12 months, a report

by GlobalData has found.

Government initiatives and improved payment infrastructure have seen the share of cash in total payment volume fall from 57.6 per cent in 2014 to 52 per cent in 2018.

According to Global Data’s report, Payments Landscape in Portugal: Opportunities and Risks to 2022, the volume of cash payments is expected to fall further to 48.4 per cent in the next three years.

The introduction of ‘SCT Inst’ in Portugal in September 2018 – a pan-European instant payment scheme – has contributed to this trend. It enables peer-to-peer electronic fund transfers of up to 15,000 euro within 10 seconds and is available 24/7.

To reduce the dependence on cash and promote electronic payments, the government capped the amount of cash per transaction for residents and non-residents to 3,000 euro

and 10,000 euro respectively in August 2017.

The government also mandated income tax payments over 1,000 euro be made through bank transfer, cheque or direct debit.

One month prior to this, central bank Banco de Portugal enacted regulation enabling financial institutions to allow their customers to open bank accounts online. With this, several banks, including Novo Banco, Millennium BCP and Santander, allowed consumers to open bank accounts through digital channels.

Nikhil Reddy, payments analyst for GlobalData, said: “The implementation of an instant payment system, cap on cash transactions and the push for digital banking are expected to help the country move towards a digital economy.”

“These initiatives are likely to displace cash to a certain extent in favour of electronic payments during the forecast period.”

According to the report, the growing preference for card payments has resulted in a number of international players strengthening their presence in Portugal.

In December 2016, Germany-based mobileonly bank Number26 launched in Portugal, offering a free N26 account and Mastercard debit card that can be used to make payments in stores and online.

November 2018 saw US-based payment service provider EVO payments partner with EuroBic to launch merchant acquiring and payment services in Portugal.

Then, in December last year UnionPay signed an agreement with Millennium BCP to issue its cards in the country.

NatWest launches debt assistance tool NatWest has launched an online tool in partnership with Paylink Solutions, aimed at customers in financial hardship.

The service will reduce the time customers spend populating an income and expenditure form from 25 minutes to five minutes, by automating the process using Open Banking technology.

According to NatWest, customers were previously required to complete a lengthy, complex document and manually input hundreds of pieces of information. Upon completion of the online form, customers will be able to verify any information that has been manually input into the system, which NatWest said can automatically detect and highlight unusual spending patterns.

Customers will then be given the option of speaking to a specialist team member over

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

the phone about a repayment plan or being referred to debt and counselling charities.

Dave Lowe, chief administrative officer for personal banking at NatWest, said: “For any customer in financial hardship, gaining a full understanding of their debts is the first step that needs to be taken to ensure they get the help they need.

“We’re using Open Banking technology to take the time, effort and stress out of helping customers take this vital first step so that we can focus on finding a long-term solution for their financial problems.”

NatWest has been working with Paylink to create digital debt tools for customers and, earlier this year, launched a ‘Digital Referral Form’, which allows staff to refer customers who need debt advice directly to debt advice provider PayPlan.

METRICS

Open Banking Implementation Entity on how account providers’ (ASPSPs)* Open Banking APIs are performing with key performance metrics. *Account providers (ASPSPs) are currently made up of the following banks, building societies and sub brands: Allied Irish Bank, Barclays, Bank of Ireland, Bank of Scotland, Danske, First Direct, First Trust Bank, Halifax, HSBC, Lloyds Bank, Marks & Spencer, Nationwide, NatWest, Santander, The Royal Bank of Scotland and Ulster Bank.

97.61% Average API availability

66.7m

Successful API calls (actual)

879

MILLISECONDS

Average API response time

2.18% Failed API calls

97.91% Successful API calls

Aug/Sept 2019

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News

Newcastle Building Society launches debt assistance app

Canadian Lenders Association expands with verification firm Inverite, the real-time bank verification service firm, has joined the Canadian Lenders Association (CLA) as an affiliate member. Inverite offers lenders access to the same data that Open Banking will ultimately provide if it is implemented in the country.

By accepting affiliate membership, Inverite has agreed to support the growth of all aspects of Canada’s lending ecosystem, including policy, advocacy, standards, innovation, and the adherence to and promotion of best practices.

Gary Schwartz, president of the CLA, said: “Inverite has demonstrated a strong record of providing innovative fintech services to Canadian lenders.

We look forward to working with our members to influence policy in a way that promotes transparency and fosters responsible and ethical lending practices nationwide.”

Lloyd Evetts, Inverite’s director of business development, added: “As one of the companies providing instant bank verification services to lenders, we look forward to meaningful contribution to the CLA’s efforts to support a consumer-friendly lending industry in Canada.”

The announcement came just weeks after a report published by the Standing Senate Committee in Banking, Trade and Commerce said Canada is at risk of falling behind other countries in the implementation of an Open Banking framework.

The report made several recommendations, including that the federal government enacts changes to privacy laws to modernise them and prioritise customer protection.

The committee also suggested a registry of accredited third-party providers be created, as well as an ‘innovation sandbox’ that allows the safe testing and development of Open Banking technology.

According to the report: “The committee feels that control over personal financial data should lie with the consumer, and not with the businesses that collect it. Four million Canadian consumers are already taking control by using screen scraping apps offered by fintech companies to meet their needs for a more personalised, convenient digital banking experience.

“Open Banking is necessary for Canadian consumers and businesses and needs to be implemented decisively. Canadian consumers need an Open Banking framework to keep their personal financial information safe, to be provided more choice and improved financial products and services, and to help keep the Canadian financial sector strong and internationally competitive.” Canada’s lag was highlighted by the most recent EY Open Banking Readiness Index report where it ranked last out of 10 countries on consumer adoption and how conductive its regulatory environment is for Open Banking.

As one of the companies providing instant bank verification services to lenders, we look forward to meaningful contribution to the CLA’s efforts to support a consumer-friendly lending industry in Canada.

Lloyd Evetts, Director of Business Development, Inverite

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

Newcastle Building Society has launched a digital debt help app, with integrated Open Banking technology.

The online facility has been developed by Paylink Solutions and is available to customers facing financial difficulty. It also offers extra support to those customers that need help in understanding their financial position before making arrangements to change mortgage payments.

Customers will log on to the service, give their consent and bank name and have all their spending and earnings aggregated within 20 seconds.

Newcastle Building Society said this means advisers will spend less time collating information, allowing them to focus on outlining options and providing support.

Michael Conville, head of mortgage operations at Newcastle Building Society, said: “Our society’s mortgage arrears rates are well below the sector average, and when we receive calls from customers who are either approaching or are in some form of financial difficulty, we want to be able to do the best we can for them. In instances like these, customers may be in a heightened state of stress and may be unsure about their financial situation.

“Offering this digital service, which can quickly provide an accurate overview of income and expenditure utilising Open Banking, reduces the onus on the customer to provide this information. With the facts at our fingertips we can spend more time discussing how we can support customers.”

Susan Rann, CEO of Paylink Solutions, added: “This is the first digital debt advice journey we’ve developed for a building society, which has been designed to make the income and expenditure and debt referral processes as quick, accurate, convenient and secure as possible for customers. “Integrating Paylink Solutions’ software means Newcastle can provide support to even more people.”

Aug/Sept 2019

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News

Tandem uses Open Banking for mortgage launch

Allpay joins financial services consortium UK card manufacturer and bureau allpay.cards has joined the consortium b.yond, which will see it collaborating with other providers to deliver a platform for established and challenger banks.

The consortium is comprised of: Global Processing Services, Pannovate, Visa, MeaWallet AS, W2 Global Data and Modulr.

The platform enables lenders to deploy digital payment services, with a focus on speed to market and enhanced customer experience.

Emily Lovelock, head of sales at allpay.cards, said: “We anticipate b.yond will be a game changer for companies looking to get a digital banking solution into consumers’ hands quicker. What we will be able to provide is a tried and trusted solution, faster than anyone else in the market.

“Rather than a long six to 18-month programme launch, b.yond will provide a live solution with physical cards in just eight weeks.”

Neil Harris, representing the consortium, said: “b.yond is breaking the mould with its consortium of industry-leading companies who are coming together to drive fintech innovation to a new level of simplicity and speed.

“The allpay team have been brilliantly engaged and have embraced the new collaboration model, working in step with the consortium to deliver a next generation solution in a six to eight-week time frame. The first b.yond card showcases allpay’s high-end production capability while delivering an innovative and elegant vertical design.”

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

FAST STATS

151

Regulated providers now offer Open Banking Source: Open Banking Implementation Entity

£1.5m

Prize fund for the 2020 Open Up Challenge Source: Nesta Challenges

Tandem Bank is to launch a crowd-designed mortgage for first-time buyers, which will also make use of Open Banking.

The digital bank said it will give consumers the opportunity to sign up to become ‘co-creators’, offering input into the design phase of the mortgage.

The mortgage product, which it claimed would be the UK’s first crowd-designed mortgage, will then be tested by a small group of customers by the end of 2019 before a full UK launch in 2020.

Tandem also revealed that, as part of its new mortgage offering, it is developing a method of credit scoring based on a customer’s aggregated financial data, enabled by Open Banking.

According to the bank, this will allow it to offer mortgages to people who might not have been accepted by other lenders, by building a more rounded picture of how they borrow, spend and save through its advanced banking app.

Among those most likely to be refused or offered unfair rates by traditional lenders are freelance workers, those that are part of the gig economy, and customers with thin or bad credit histories.

Nick Bennett, chief operating officer at Tandem, said the company was building a mortgage proposition that reflected the changes happening in the sector.

“We’re looking at new and intelligent ways of assessing whether a potential customer is creditworthy, as well as ensuring our mortgage offering meets the needs of today’s consumers, rather than taking a traditional approach,” he said.

“This is why we’re keen to have as much input as possible from the public on ways in which we can improve the current market offering.”

Ricky Knox, co-founder and CEO of Tandem Bank, said: “It’s hard for most people to get on the property ladder and we want to help them embark on that journey with new tech and a customer-first approach to design.”

In addition to the crowd-designed mortgage, Tandem Bank may consider offering a range of different, specialist solutions such as Help to Buy and Shares Ownership to help first-time buyers get a foot on the property ladder.

Aug/Sept 2019

News

TurkishBank and Token announce tie-up TurkishBank UK has joined forces with Open Banking platform Token.io to give third parties access to its UK retail and business customer accounts.

The bank, which serves the banking needs of Turkish-speaking people in Britain, said Token’s API platform will allow regulated European third party providers access to the accounts and will help launch multi-banking services, such as the ability to bring accounts from multiple institutions into a single customer view.

The platform will also deliver crypto-based security, guaranteeing full compliance with PSD2’s regulatory technical standards (RTS) for strong customer authentication (SCA) and common and secure open standards of communication.

Founded in 2015, Token said its product is the only solution that fully meets the PSD2 requirements.

PSD2 follows the original Payment Services Directive, which was adopted by the EU in 2007. The legislation established an EU single market for payments to encourage the creation

Australian government introduces consumer data rules Legislation on consumer data rights has been introduced in Australia, providing a foundation for the introduction of Open Banking.

The rules give consumers more freedom to share their account data with third parties, including fintechs and challenger banks. Australia’s competition watchdog, the ACCC, will approve the legislation and provide guidance on how the industry should implement the rules.

CEO of the Australian Banking Association Anna Bligh said the Consumer Data Right legislation would create the legal foundation for Open Banking, which will increase competition across the industry.

She said: “Empowering customers with the ability to use their data to drive a better deal on banking products has the potential to dramatically increase competition

of safer, more innovative payment services.

“PSD2 has been a driver for Open Banking in the UK and with Token’s API we can look beyond compliance and start leveraging the opportunities it is creating,” said Steven Bennett, chief executive officer of TurkishBank UK. Bennett said Token’s integration relieved a variety of technical pain points for the bank by providing a standardised and secure way to offer more flexibility and allow the bank to expand its services in Turkey.

“The platform is scalable and means we can expand our digital services abroad. Though domestic regulation in Turkey is lagging behind UK, Open Banking is gaining pace and this presents a strong growth opportunity for the group,” Bennett explained.

Marten Nelson, co-founder of Token, said: “PSD2 represents a new era in UK banking and other markets are starting to implement their own regulations.

Our partnership with TurkishBank shows the value that API standards deliver to all sides of the ecosystem – banks, merchants and consumers.”

TurkishBank UK’s last annual report revealed profits before tax decreased

from £744k to £46k in 2017 due to ‘an increase in external professional fees’ and investment in upgrading its internet services. However, the bank, which is part of the TurkishBank Group, said it will continue to improve the quality of its services and build on its underlying operating profits.

The survey results were revealed at the launch of ING’s Innovation Lab in London earlier this year. The Lab enables fintechs, ING partners and clients to collaborate on projects to advance technological developments in financial services.

and foster innovation across the industry.

“Passing this legislation for the Consumer Data Right provides the foundation for these reforms to be delivered.”

Bligh added: “Following the passage of the legislation and the ACCC guidance on the rules, the industry, together with regulators, will begin rigorous testing to ensure the system is safe for Australian bank customers to use.

“The industry will continue to work with the government in the final stage of the introduction of Open Banking to deliver a system which both increases competition and ensures data is kept secure.”

The Open Banking regime in Australia

is expected to begin in 2020 for the four major banks, with other Australian banks to join the system later.

Executive director of policy for the Australian Banking Association Christine Cupitt said the legislation was a critical step to making the Open Banking reforms a reality for Australian bank customers.

“Open Banking will be a win for customers, increasing competition and making it easier to get the best deal possible from their bank,” Cupitt said.

“Giving customers greater access to their data will make it easier and simpler to shop around for a better deal on a credit card, home loans and other banking products.”

Empowering customers with the ability to use their data to drive a better deal on banking products has the potential to dramatically increase competition and foster innovation across the industry.

Anna Bligh, Chief Executive Officer, Australian Banking Association

13

Up Close

THE BIG INTERVIEW Mark Buitenhek ING

Structural integrity While some banks have barely dipped a toe in the Open Banking pond, ING has jumped in and is changing its entire operation in anticipation of the future. Joe McGrath speaks to Mark Buitenhek, the company’s head of transaction services.

Joe McGrath reports

W

hen it comes to speed of adoption, few European brands have moved to embrace the opportunities from Open Banking like ING. In April, the company announced its latest commitment, launching three new APIs to the French consumer banking market. The bank has been keen to make plenty of noise about its collaboration programme with European fintechs – while some of its competitors have opted for a more cautious approach, concerned about the implications for market share.

But for ING, it goes further than the spirit of co-operation. It sees Open Banking as the dawn of a new era, where the very corporate structure of banking institutions will have to change to adapt to the growing and changing demands of customers.

“We firmly believe that banks of the future will look completely different,” Mark Buitenhek, head of transaction services at ING, tells Open Banking Expo Magazine.

“We embrace an open platform strategy. Having Open Banking capabilities or API-based capabilities

is the only way forward,” he explains.

The ING strategy is built upon the expectation that customers will eventually embrace multi-channel financial services through brands with which they have a close affinity.

“I have been in banking for 30 years, says Buitenhek. “I started when we had paper and cheques. It is important that we keep looking outside of our industry for ideas. Talk to tech companies who are ahead. Speak to companies in China, in Asia.”

Buitenhek says he has encouraged his colleagues to watch how products and services have evolved in other sectors, outside banking, as these may have clues to what tomorrow’s bank will look like.

“Don’t just stay within the bank and understand banking products. Have an eye on what is happening outside of your world,” he says.

Overcoming market challenges However, Buitenhek warns of a number of market challenges facing established businesses. “For a very long time, the banking industry has worked with developing everything on our own, standardised and in large groups.

What we do see is that if you bring something that adds real value, companies like Revolut and TransferWise will find a place where there is great friction in the products that banks are offering.

Mark Buitenhek

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

It has been very successful but the way we are now able to connect with each other has dramatically changed.

“It is changing that attitude and that mindset. It is a completely different way to look at the world. We tackle this by creating a more agile organisation,” he explains.

ING has created multi-disciplinary teams throughout the organisation with lots of autonomy, which Buitenhek says enables them to mimic what start-ups are doing.

He cites legacy issues as a challenge facing banks as they work to create a more flexible architecture that can accommodate APIs, as well as the regulatory environment and cyber security.

“We are struggling with all these elements, as are regulators. Who is under the supervision of a regulator?

If you are working with a fintech, you will immediately move to a public cloud. In some countries, regulators don’t permit the use of public clouds,” he says.

“Those are the kinds of obstacles that you need to overcome. It is also a fine balance with the customer experience. You cannot afford any disruption right now.”

Steering future regulation PSD2 was introduced at a time when innovation in the banking sector was stagnant. Opening it up to fintechs and third party businesses would allow legacy banks the opportunity to innovate and compete with the rising challengers.

However, Buitenhek argues that breaking open the industry in this way, while institutions remain liable for data, has its own issues.

He questions: “How do you ensure there is a secure world? If you think of an open and blurry world where everything connects with everything – how do you regulate that? The balance between customer experience, one click, and security is getting much more attention right now.

Aug/Sept 2019

Up Close

“Things are not being stolen at banks anymore. The whole debate is about whether your card is being listed on a website somewhere. How do you protect against that? I can see all these things happening at the same time. It will take some time to find that balance and come up with regulatory protection that makes sense.”

Consumer benefit In spite of the advances made in the Open Banking sphere, particularly in the UK, consumers have been slow to embrace what is on offer. According to Buitenhek, it will take time for them to make the move to new services, or from incumbent institutions which have spent years winning their trust.

“What we do see is that if you bring something that adds real value, companies like Revolut and TransferWise will find a place where there is great friction in the products that banks are offering,” he says.

“It is just waiting for someone to step into this space. Our vision is 20 per cent to 30 per cent of the market will start using those services, but it will take some time.”

Citing recent studies conducted by both ING and Mastercard which highlighted the hesitance among the majority to switch away from a trusted bank, Buitenhek says that younger people are far more willing to bank with a ‘non-bank’.

“The only thing that incumbents can do is prepare themselves and become so good that people don’t want to move,” he adds.

“The incumbents who are still licenced have the trust of the public and have the best starting point because of the distribution. But challengers are trying to become banks. They understand that not having that banking licence is a big disadvantage.” ■

Buitenhek is speaking at Open Banking Expo Europe on 4 October in Amsterdam. For more info visit openbankingexpo.com/europe 15

L E A D F E AT U R E / E U R O P E

THE BEST OF EUROPE

★

Europe is often talked about as one, homogenous, entity.

But which countries are home to the most compelling commercial launches and how are EU-wide regulatory changes influencing development at country level?

★

★

Ellie Duncan reports

★

★ ★ ★ ★

E

urope is often referred to as one entity that is presumed to be working towards Open Banking adoption at a consistent pace, in line with EU-wide legislation. But this ignores the fact that individual countries have their own rates of adoption and different ideas.

It is beneficial for European countries to be unified on Open Banking from a regulatory standpoint. But it is also important that legislation does not stifle innovation at country level.

Some of the most interesting developments are now around wider Open Banking initiatives that are not solely regulationdriven, says Brian Jamieson, chief executive of UK fintech Centtrip. ›

One of the more interesting uses of Open Banking is the ‘Open Banking for Good’ approach of Nationwide Building Society.

James Buckley Vice President & Director, Infosys Finacle (Europe)

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

›

★ ★ ★ ★ Aug/Sept 2019

EUROPE

17

L E A D F E AT U R E / E U R O P E

› He says other developments in Europe are more market-driven, serving to drive and promote collaboration across industries to ensure effective and secure access to data.

“It is in this area that we are seeing exciting developments from non-bank companies.

Companies such as [UK-based] Bud are delivering excellent platforms designed specifically to serve the Open Banking initiative and providing easier access to the network for companies not yet capable of integrating directly with banks.”

“In a similar vein, [UK-based] Codat has created a hub connecting accounting software and bank accounts. Our own technology is focused on providing an intelligent treasury solution to businesses, utilising the Open Banking network to connect customers to a host of transactional, descriptive and predictive analytic services and providers.”

Game changing Nordigen’s co-founder and chief executive, Rolands Mesters, flags two important developments when it comes to Open Banking in Europe.

“The first is a major optimisation of the way people understand their own financial health,” he says. “Myriad fintech apps have sprouted, including personal finance management solutions such as Spendee [founded in the Czech Republic], which help individuals be savvy with their money.”

But he says: “The real game changer is the new approach banks and lenders are taking to assessing the creditworthiness of a loan applicant.

Rather than relying on credit bureaus, which have an incomplete picture of an applicant’s financial health, European

18

★

★

★

★

★

★

personal finance management offerings of companies like Emma and Yolt, which take advantage of the digital nature of Open Banking to allow customers to consolidate all their financial digital data, Myriad fintech apps have to the more ‘bricks and mortar approach’ of sprouted, including personal [Swiss-based] Sonect, finance management solutions which uses Open such as Spendee [founded in Banking APIs to the Czech Republic], which ★ convert retail premises into ATMs”.

Emma, which launched in January help individuals be savvy 2018, was established in London by with their money. chief executive and co-founder Edoardo Moreni. Yolt launched in the UK in June Rolands Mesters 2017 and has since expanded into Italy Co-founder and Chief Executive, Nordigen and France, having clocked up 500,000 ★ registered users within 18 months. It is banks now have access to account a venture of ING Bank NV, the Dutch transaction data at scale.” multinational banking and financial This means there are far more robust services company. and fair assessment processes now in “One of the more interesting uses place, increasing the efficiency of loan of Open Banking is the ‘Open Banking assessments and improving financial for Good’ approach of Nationwide inclusion.

Society,” Buckley adds. He ★ Building James Buckley, vice president and says Nationwide is not just looking at director for Europe at digital banking Open Banking as a way of creating application provider Infosys Finacle, monetary value, but also as a way says the most exciting examples of to create value for society.

Open Banking developments in “This has led them to back apps like Europe are many and widespread.

Toucan – a money and mental health app These range from “the standard that alerts a nominated trusted ally if the ★ going is getting tough – or Openwrks, an app that lets people create accurate income and expenditure statements in minutes.”

Tim Hooley, chief technologist, EMEA FSI at open source technology firm Red Hat, cites yet another example of the best Europe has to offer, this time in Spain. ★ “On a banking level, Spanish banking group BBVA has adapted quickly to Open Banking developments by building a single, global platform that is fully automated, self-served, and data-centric,” he says. “It has also made eight of its APIs commercially available, enabling ★ companies, start-ups, and developers ›

Aug/Sept 2019

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L E A D F E AT U R E / E U R O P E

“France and Belgium have made less progress in adopting Open Banking than expected, and Italy is adopting a more conservative ‘wait-and-see’ approach. What is evident is how a pan-regional regulation such as PSD2 is read differently in markets with different digital dynamics,” he adds.

› to build new products and services by accessing and integrating customers’ banking data – with their permission – into their applications.”

At the frontier Hooley also mentions Yolt as having “truly embraced the Open Banking vision”.

Yolt’s chief business officer Leon Muis says, while there have been some innovative Open Banking launches in Europe, none have been quite as exciting as those that have come out of the UK. He believes the UK is at the forefront of Open Banking – not just in Europe, but globally.

“I think the great thing is that the second payment services directive (PSD2) is European legislation and the UK is still part of Europe, but under the Competition and Markets Authority [Open Banking] order the UK went ahead of its time,” he says.

The UK has also benefited from having a less complex regulatory system than somewhere like the US, he says.

“As a result, the UK has gained good recognition as a leader in Open Banking, which is why we see fintech companies from elsewhere launching their products in the UK first, as they find the regulatory space easier to navigate,” he says.

Companies which have done this include Silicon Valley-based Open Banking platform provider Token.io and Amsterdam-based Yolt, both of which are “running on UK-based cloud infrastructure”.

Some have found that the fragmented market in Europe is more of a hindrance than a help though, and that regulation has only exacerbated this.

“The revised Payment Service Directive (PSD2) is setting the direction for each country. However, it hasn’t been effective in setting the pace globally,”

20

★ says Hooley. He cites the results of

★ European ecosystem According to Buckley, EU-wide a survey by Swedish Open Banking regulatory changes, such as GDPR platform Tink of 442 European banks, and PSD2, are creating a distinctively which revealed that 41 per cent of European market in Open Banking.

European banks failed to comply “This is forcing individual countries with the March 2019 PSD2 deadline, to make a choice between trying to requiring them to provide a testing ★ environment for third-party providers. ★ carve out a distinctly national offering – as is happening in the UK where fastMeanwhile, in contrast, UK regulators moving challenger banks are taking “have been proactively embracing a lead – or working in a pan-European regulatory changes”. context, which might mean moving Vivek Awasthi, chief information officer slower, but may ultimately mean a at Currencies Direct, says some countries larger market,” Buckley says. in Europe, such as the UK, Sweden and He cites the Berlin Group, a panthe Netherlands, are pioneering in the ★ payment space. But he notes that ★ European payments interoperability standards and harmonisation initiative, others are hindered by an historical as an example of the collaborative misunderstanding of the scale of approach, and which “may deliver the changes required in banking more value in the longer term but applications and infrastructure. currently offers less immediate opportunities than countries ★ ★ like the UK”.

Strategically, Europe is likely to gain some advantage from aligning its Open Banking developments as it seeks to hold its own among some of the technology behemoths, such as Facebook and Amazon. ★ ★ “If European Open Banking companies are going to survive in a world dominated by Asian and American ‘big tech’ companies, they are only going to be able to do this by working together to make a genuine European ecosystem,” ★ ★ cautions Buckley. ■

Aug/Sept 2019

I N C O L L A B O R AT I O N W I T H

EVENT PREVIEW OPEN BANKING: A CANADIAN LENS

Discover how Open Banking could transform Canada’s financial landscape by attending this unique event!

THERE IS STILL TIME TO REGISTER AT OPENBANKINGEXPO.COM/TORONTO M E D I A PA R T N E R S

21

OPEN BANKING: A CANADIAN LENS

WELCOME Open Banking Expo is delighted to host Open Banking: A Canadian Lens, in collaboration with Equifax Canada this month. With a government consultation underway and legislative action looking likely, there is no better time to collaborate and prepare for the possibility of a new dawn for financial services.

O U R E X P E R T S P E A K E R FA C U LT Y

Mayank Mishra

Carolyn Burke

Michael Legare

Managing Director, Global Head Digital Channels

Head of Enterprise Payments

Vice President, Digital Transformation

We welcome the region’s visionaries and pioneers in Open Banking to explore the potential and pitfalls it presents for the industry and for consumers.

This preview is designed to give you a brief taste of what’s on. Do make sure that the date is in your diary, and if you have other colleagues who would benefit from spending the day in such a specialist environment, please do encourage them to register.

Andrew Moor

Eyal Sivan

Jennifer Reynolds

President & Chief Executive Officer

Head of Strategic Platforms, Enterprise Architecture

President & Chief Executive Officer

We look forward to meeting you!

Adam Cox Managing Director Open Banking Expo

Andrew McFarlane

Dr Bill Roberts

Rizwan Khalfan

Global Open Banking Lead & Managing Director Financial Services

Head of Open Banking

EVP, Chief Digital & Payments Officer

T H A N K Y O U T O O U R PA R T N E R Equifax is a global information solutions company that uses unique data, innovative analytics, technology and industry expertise to power organizations and individuals around the world by transforming knowledge into insights that help make more informed business and personal decisions. Headquartered in Atlanta, Ga., Equifax operates or has investments in 24 countries in North America, Central and South America, Europe and the Asia Pacific region. It is a member of Standard & Poor’s (S&P) 500® Index, and its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. Equifax employs approximately 11,000 employees worldwide.

Yassir Jiwan

Adam Felesky

Dominique Samson

Head of Innovation

Chief Executive Officer & Executive Chairman

General Counsel & Operations Chief of Staff

Sen. Colin Deacon

Sen. Howard Wetston

Roy Kao

Banking, Trade & Commerce Committee

Banking, Trade & Commerce Committee

Managing Director

For more information, visit Equifax.com

22

Aug/Sept 2019

OPENBANKINGEXPO.COM/TORONTO

AGENDA 08:00

REGISTRATION AND NETWORKING

08:45

WELCOMING REMARKS From the Chair: Roy Kao, Managing Director, MaRS Fintech From our partner: John Hartman, President, Equifax International

09:00

THE FUTURE OF OPEN BANKING Open Banking is a reality and it is re-shaping the financial services industry right now! Europe is at the forefront, but Asia, the Middle East and Latin America are also commited to regulatory regimes.

Canada may be next. But is Open Banking really the stimulus to drive innovation and revenue success?

Where are we headed and what does the future hold?

Accenture’s Global Open Banking Lead will reveal his organisation’s latest report on Open Banking; including their vision for a thriving, open, digital future, and help to navigate you to where the best opportunities lie.

Andrew McFarlane, Global Open Banking Lead & Managing Director, Financial Services, Accenture Financial Services

09:30

LEADERS DEBATE As Open Banking gathers apace, our retail banking experts will share their insight, predictions and first moves. During this session the audience will discover where Open Banking is heading for some of the leading banks, and what is next strategically. We will question the leaders on their approach so far and where they are looking to take Open Banking in the future. The importance of the customer focus, user experience and the learnings from initial pilots will be explored.

PANEL CHAIR: Jennifer Reynolds, President & Chief Executive Officer, Toronto Finance International Andrew Moor, President & Chief Executive Officer, Equitable Bank

10:45

NETWORKING BREAK

11:05

VISIONARY SPOTLIGHT Chief Executive of Portag3 Ventures and Chairman of KOHO offers his insight into the challenges and opportunities presented by Open Banking in Canada.

Adam Felesky, Chief Executive Officer & Executive Chairman, Portag3 Ventures & KOHO

11:35

PIONEER INSIGHT The UK was the first market to implement Open Banking in January 2018, driven by the Competition and Markets Authority’s (CMA) retail banking market investigation. Its report highlighted the need to accelerate technological change in the UK retail banking sector. Get exclusive insight direct from the CMS’s Head of Open Banking, who will reveal the UK’s journey so far.

What were the challenges, how did lenders overcome them, has Open Banking’s implementation met expectations yet?

Dr Bill Roberts, Head of Open Banking, Competition & Markets Authority

12:20

PARLIAMENTARY SENATE PERSPECTIVE: A conversation with Senators Howard Wetston (Ontario) and Colin Deacon (Nova Scotia) The federal government has undertaken a review of the merits of Open Banking for Canada. At the Parliamentary level, the Senate Banking, Trade and Commerce Committee undertook a study of the same.

Learn more about the committee’s recommendations to the Government for decisive action on Open Banking from two key committee members, as well as their expectations for future government activity.

12:50

FIRESIDE CHAT Interview with a digital trailblazer from one of the Big Six banks Rizwan Khalfan is responsible for setting the strategic direction for all digital and payments activities, while creating more intuitive, personalised and integrated experiences that help customers live their lives. Join us for a deep dive into his view of the future of Open Banking and consumer behaviour.

Rizwan Khalfan, EVP, Chief Digital & Payments Officer, TD Bank Group

13:20

CLOSING REMARKS FROM THE CHAIR: Roy Kao, Managing Director, MaRS Fintech FROM OUR PARTNER: Bill Johnston, Vice President, Data and Analytics, Equifax Canada

Eyal Sivan, Head of Strategic Platforms, Enterprise Architecture, CIBC Michael Legare, Vice President- Digital Transformation, National Bank of Canada Carolyn Burke, Head of Enterprise Payments, Royal Bank of Canada Mayank Mishra, Managing Director, Global Head Digital Channels, Finance Canada 10:20

INNOVATION SPOTLIGHT Equifax Canada and its partner Flinks are setting the stage for transformation in Canada by helping clients embrace data sharing with a breakthrough solution and unparalleled connectivity to bank transaction data.

Learn more about this partnership and hear how you can digitize your processes, improve user experience and reduce delinquency.

Dominique Samson, General Counsel & Operations Chief of Staff, Flinks Yassir Jiwan, Head of Innovation, Equifax Canada

23

OPEN BANKING: A CANADIAN LENS

60 SECONDS WITH OUR SPEAKERS We asked our speakers a few questions ahead of the event, and here is what some of them had to say. To view all the speaker interviews, you can see them online at openbankingexpo.com, or if you are attending the event they are available within the event app. innovation driven by the broad sharing of consumer financial data.

Eyal Sivan Head of Strategic Platforms, Enterprise Architecture CIBC

Q: Explain what you do A: I am the product owner for CIBC’s internal strategic platforms, including the API Foundation, our awardwinning API platform. My goal Is to help our internal developers use these platforms to build innovative technology products as quickly, cheaply and easily as possible.

Q: If Open Banking is implemented in Canada, what are your predictions for the future of its financial landscape?

A: In many ways, Canada is an ideal region to develop Open Banking. We already have a secure federal identity scheme (Verified.Me) and are making great strides in payment modernisation, with both schemes supported by the large incumbents. Our government has mature IT organisations operating at federal and provincial levels, and global technology leaders continue to bring their talent and knowledge to our cities. Open Banking will serve as a powerful catalyst to bring all these ingredients together, leading to innovative financial products, increased financial literacy, and more consumer choice.

Q: Why did you choose to speak at Open Banking Expo Canada?

A: The rise of Open Banking around the world has led to a broad recognition here at home that we must catch up in order to remain competitive on the global stage.

As one of the first dedicated Open Banking events in Canada, the Open Banking Expo seemed like an excellent opportunity to be at the forefront of the dialogue. Local Open Banking activity has only increased since the event was originally planned, and events like the Expo are a great way to drive the right discussions.

Q: What Open Banking initiatives has your organisation undertaken so far?

A: Although CIBC has not published any open APIs yet, we are taking several steps to ensure we are prepared for the arrival of Open Banking. First and foremost, we are working very hard to make sure we build APIs the right way internally, using a common platform, based on a robust and scalable microservices architecture – our platform, the API Foundation, has received multiple industry accolades. Second, we are identifying opportunities to create useful, revenue-generating API products through exploratory events like hackathons, the last of which was called ‘CIBC Hacks Open Banking’.

Q: What are the challenges to overcome before Canada can implement Open Banking?

A: The Canadian banking sector has a reputation for being measured and cautious. In many ways, it was this caution that enabled Canada to emerge from the 2008 Great Recession virtually unscathed, so it is often considered a virtue. However, this risk-averse temperament is causing us to fall behind in terms of technological innovation and consumer choice, relative to other markets. A major challenge facing the adoption of Open Banking in Canada is addressing this balance between cautious attention to financial stability and

Q: Outside of the banking sector, which industries do you see benefiting from Open Banking?

Will they be quick to adopt the principles?

A: Just as banking services permeate all of commerce today, they will continue to do so tomorrow in the world of digital commerce. Open Banking will only accelerate and deepen this process, via open standards and facilities than enable a broad ecosystem of participants to move money in a more frictionless way. Ultimately, Open Banking will benefit any industry that expects to receive payments, buy goods and services, or manage money – so, all of them.

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Aug/Sept 2019

OPENBANKINGEXPO.COM/TORONTO

Andrew McFarlane Global Open Banking Lead & Managing Director Financial Services Accenture

Q: Explain what you do A: I’m Accenture’s Global Head of Open Banking – my role is to ensure that we as a company are constantly learning and evolving our thinking on Open Banking by working collaboratively with our clients around the globe, and really helping them build a business case for Open Banking success.

Q: Why did you choose to speak at Open Banking Expo Canada?

A: I was excited when I looked into the feedback from other conferences that had been run by the team – there are not that many conferences that are purely dedicated to Open Banking and the quality of the speakers that have been attracted to this event is very high. I look forward to sharing the stage with many industry colleagues who have some really interesting perspectives on Open Banking.

Q: What are the challenges to overcome before Canada can implement Open Banking?

A: For me, the main challenge to work through is identification of the problem that we are trying to solve here. In the UK, it was all about switching. In Europe, about bringing competition into the payments market.

For Canada, is it API standardisation and reducing the reliance on the screen scrapers.

Q: If Open Banking is implemented in Canada, what are your predictions for the future of its financial landscape?

A: Accenture predicts widespread adoption of Open Banking in Canada, but we expect it to be a slow takeup, which would be comparable with other jurisdictions around the globe. In due course, retail banking aggregation and payment services will become table stakes, and all banks would be expected to provide these. The Open Banking battleground that we expect to see vigorous competition in is the small business and small corporate space, where customers can gain real benefit from a collaborative relationship with their institution.

Q: Outside of the banking sector, which industries do you see benefiting from Open Banking?

Will they be quick to adopt the principles?

A: As with the Australian model, we expect to see Open Banking evolve into Open Data and provide aggregated customer insights that add real value – we see the evolution into market places where the central players in these ecosystems can solve their customer’s financial and non-financial needs, and will base these transactions around key live events e.g. home purchasing.

Dr Bill Roberts

Head of Open Banking Competition & Markets Authority

Q: Explain what you do A: I am responsible for the implementation of our Open Banking remedies through our Implementation Trustee, with whom I work very closely on a day to day basis. I am also on the steering group of the Government’s Smart Data project and sit on the FCA’s Advisory Group on open finance.

Q: Why did you choose to speak at Open Banking Expo Canada?

A: It was an opportunity to share what we had learnt in the UK about design and implementation, particularly what worked well and what we maybe could have done better.

Q: What are the challenges to overcome before Canada can implement Open Banking?

A: I am not sufficiently knowledgeable about the Canadian retail banking market to comment in detail, but if the experience of the UK is anything to go by I would anticipate that establishing the liability model between banks and third party providers will be more of an issue than finding solutions to technology problems.

Q: Outside of the banking sector, which industries do you see benefiting from Open Banking?

A: Our experience suggests that any market where the customer’s product usage history has a bearing on a product’s price to them could be relevant. So other financial products such as loans and insurance and outside the financial sector energy and communications.

25

VIEW FROM THE TOP

The jump towards premium APIs Huw Davies Head of Premium APIs, Open Banking Implementation Entity

B

ack in 1993, Javier Sotomayor became the first man to clear eight feet in the High Jump. A world record that still stands today.

Like most elite sports, there’s an entry level to compete: a set of requirements and a minimum standard that must be met. It would be dull if competitors just turned up and everyone jumped the same entry height. The bar would not get raised and competitors would not inspire one other to go higher and better.

Perhaps this is a slight creative leap, but let’s apply this analogy to the world of Open Banking. Entry conditions have been defined by UK and European regulation (the CMA Retail Banking Marketing Order and PSD2 respectively).

The stadium has been created through the delivery of the UK Open Banking Standard, a Trust Framework and Directory with supporting tools such as the sandbox, as well as assurance and conformance tools.

To date, the main focus of banks and account providers has been to meet the regulatory requirements. We can already see the creation of an emerging dynamic and vibrant market with over 450 participants bringing innovative propositions and services to consumers and businesses.

We’re looking forward to more propositions coming to market, once all the banks have implemented the legislation (PSD2). But there is even more that could be delivered by going beyond the current regulatory requirement. To move from

compliance, to competing, to innovating.

Regulation has defined the start of the competition, but not the end.

For example, not all financial products are covered in the regulation; so to enable true Open Finance, account providers could make more product types available (such as fixed term savings, ISAs and mortgages). This will add greater value and richer insight to make financial management propositions work better.

With Open Banking payments capability, it’s clear that a good start has been made but to really unlock the opportunity, further functionality is required. This might involve moving from single payments (with secure authentication each time) to variable recurring payments, where an ongoing consent can be agreed with the third party to support more frictionless buying experiences.

This would enable much easier sweeping between accounts in financial management platforms, frictionless merchant payments (think Amazon one-click or Uber) or even smarter B2B payments (supplier-initiated payments within an agreed rule set). Banks and account providers can access rich identity data and insight that can help customers have more frictionless

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

digital experiences elsewhere in their lives. Imagine a “bank grade” Facebook log in or auto completion of long forms by giving your bank the consent to allow access to the right information.

The potential for a seriously game changing competition is huge. But, to unlock all of this, we need to move beyond regulation.

At OBIE we call this Premium APIs. Essentially, additional capability built into the Open Banking Standard to provide greater functionality and potential for innovation. For Premium APIs to extend beyond regulation, it may well require additional agreements and / or commercial relationships between banks and third parties.

This opens the door for banks to place Open Banking at the core of their business model, enabling better partnerships with third parties, more innovative products and propositions and, in turn, new business models and revenue streams.

To avoid fragmentation, the Open Banking Standard must continue to evolve and deliver richer capability.

Core enabling capability built on the existing foundations laid by the Open Banking Standard will enable greater and quicker innovation, giving greater accessibility to the entire ecosystem.

The alternative is that each bank builds different proprietary interfaces, the market becomes fragmented and progress slows. Premium APIs are just one of the many initiatives that will keep the Open Banking Standard world leading, and record breaking. ■

To date, the main focus of banks and account providers has been to meet the regulatory requirements.

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

Aug/Sept 2019

Insight Jennifer Reynolds President & Chief Executive Officer, Toronto Finance International

“To build a new future that meets the increasing demands of consumers, and in which Canada maintains the global competitive advantage of our financial system, broad collaboration is critical.”

T

he dialogue on Open Banking in Canada has shifted considerably over the last couple of years. No longer is it a question of ‘should’ or ‘if’: the narrative today undoubtedly focuses on ‘when’ and ‘how’.

The rise of Open Banking is increasingly viewed as an inevitable evolution in the Canadian financial ecosystem. Toronto Finance International, in its role as a convenor of government and the financial sector around issues that impact the growth and competitiveness of the industry, continues to bring our stakeholders together to support the development of the optimal Canadian approach to the implementation of Open Banking in the country.

To inform our thinking, we have the benefit of observing other jurisdictions’ Open Banking implementations, from government-led initiatives in the EU to market-led efforts in the US, and to learn from their successes and challenges.

No doubt, to build a new future that meets the increasing demands of consumers, and in which Canada maintains the global competitive advantage of our financial system, broad collaboration is critical. Players from the public and private sectors, technology experts who can innovate, and financial institutions that understand the complexity of our industry, must work together to build the Canadian solution.

While countries globally are moving at varied paces towards Open Banking, there is broad-based recognition that this evolution can offer significant

benefits to consumers, small businesses, financial institutions, and other third-party financial service providers.

Innovative applications for consumers which increase financial literacy and better target their financial needs; reduced red tape and faster adjudication for small businesses; and greater financial inclusion for Canada’s diverse population, are all examples of the benefits Open Banking can offer to citizens.

The good news for Canada is that not only do we have one of the fastest growing pools of financial services talent globally (financial services employment growth in Toronto is second only to Shanghai and Beijing over the last five years), we also have the fastest growing technology job market in North America. With broad collaboration between these pools of talent, Canada will be able to capitalise on the opportunity that expanding innovation can bring to the industry and the economy more broadly.

Successfully addressing the challenges of consumer protection, privacy and cyber security risks on a sustainable basis will be critical to reaping the benefits that Open Banking can potentially bring to the financial ecosystem. Devising strict data standards, requiring high security standards, and ensuring clear consumer consent and protection rules will all be key elements to a successful Canadian Open Banking implementation.

Bringing the best minds together to develop these solutions in a collaborative and efficient manner

will be a significant contributor to the growth and competitiveness of the Canadian financial sector.

While those of us in the industry may be well immersed in the opportunities and challenges of Open Banking, it must be recognised that for the general public, the issues we are debating are fairly opaque, if not invisible. A well thought out and executed public education strategy with clear and transparent communication will be critical to truly empower consumers to make informed choices and maximize the expanding financial options available to them.

Engaging the public on Open Banking and educating people on security will be key to maintaining consumer trust.

Canada is fortunate to have a financial services sector that is a one of our largest contributors to GDP, and a global financial centre which is among the world’s top ten and second largest in North America. Fostering the innovation ecosystem is critical to maintaining the industry’s global competitiveness and Open Banking has the potential to advance both emerging fintechs and established financial institutions. Mobilising the private and public sector to collaborate on the optimal Open Banking strategy for Canada is an important issue for the industry and the country. ■ Toronto Finance International is a publicprivate partnership between Canada’s largest financial services institutions and the government.

Reynolds is speaking at Open Banking: A Canadian Lens on 18 September. For more info visit: openbankingexpo.com./toronto 27

Briefing

BREAKFAST BRIEFING

CRACKING THE INNOVATION NUT I N A S S O C I AT I O N W I T H

M

ore than a year after Open Banking was launched in the UK, there are growing concerns that the banking sector has so far not delivered real innovation, despite the technological opportunities that are available.

At the Open Banking Expo Magazine Breakfast Briefing held in partnership with Equinix in London in July, there was little doubt that innovation – or the lack of it – was on the panellists’ minds.

Speakers from across the sector tackled the opportunities presented by the PSD2 directive and discussed what companies need to do to ensure success. This included how Open Banking can deliver true innovation for consumers, how banks can use their customer data to produce useful APIs for the industry, and how they can work with third parties to build ecosystems that benefit all participants in the market.

Paul Clark, chief technology officer at Tandem Bank, said the UK’s banking sector has not introduced true innovations since Open Banking was launched in 2018.

“Everything points to the fact that there is no innovation.

They’re doing an old thing in a new way,” he said. “I don’t think anyone’s doing anything new in banking. Monzo has a better bank account, but it’s the old thing in a new way.”

For Clark, both incumbent banks and challenger banks may be providing customers with a better user experience, but so far the products that have come to market have not changed. “The real innovation will come when we allow people to interact with money.

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

When they can get the right product for them in the right way,” he said.

Difficult to measure A key problem is that it is difficult to measure whether a product is innovative and each panel member said their organisation has a different approach.

Andrew Kemp, Open Banking lead at HSBC, said his firm measures success by looking at how the customer journey has improved.

“What we talk about internally isn’t just market share and origination, we’re focusing on the customer journey, measuring it in terms of customer pain points and reducing friction,” he said.

However, Nilixa Devlukia, head of regulatory at the Open Banking Implementation Authority, said it is more complicated than improving the customer journey.

“It’s a very wide question. Some of it is surely the basics of how many people in five years are providing access to their data,” she said. “But how are you going to quantify the services that wouldn’t be possible without this access or the regulatory framework? I’m not sure improved user experience is any measure of innovation – it’s got to happen. Some of what’s happening now is just a reaction to the circumstance that we have [had] bad user experience.”

Clark said his company measures innovation by the number of customers that use its products. He said: “We try to weight the value you give to the customer, but we also track customer lifetime benefit. It’s the number of customers to whom we provide a benefit. How many customers are we helping?”

Aug/Sept 2019

Briefing

Meanwhile, Eleni Coldrey, business development director for EMEA at Equinix, said one element of innovation can come when banks think more strategically about their data and APIs. She said banks have significant amounts of data that are akin to a “goldmine”, but they aren’t making any use of it.

“PSD2 has been interesting in that it forces banks to think about their API strategy,” she said. “In talking to customers, we see there is internal attention on APIs. We are seeing premium APIs being developed. Open APIs are the minimum that are being provided, but premium and contract APIs are a big field that can advance once they get past compliance.”

Coldrey added that regulation compels banks to provide data as requested by a regulated third party, but they can have more success if they take a strategic approach to how they manage their APIs and their data.

Collaboration is key?

One theme that came up during the discussion was the importance of co-operation and collaboration, rather than cut-throat competition.

The sentiment was that Open Banking technology has created an incredible opportunity, but to fully realise it companies will need to work together more effectively.

Coldrey said Open Banking technology is about creating a digital strategy that delivers a solution to customers and requires a specialist team to make it a success. Achieving this will involve multiple players in a broader ecosystem that will need to cluster together as a hub to make Open Banking a success, although this may take some time.

The sentiment was similar for Ireti Samuel-Ogbu, EMEA Payments and Receivables Head at Citibank’s treasury and trade solutions division. For her, the answer is to collaborate rather than attempt to innovate alone.

To that end, Citibank has tried to take a more clientcentric approach to meeting consumers’ needs, which includes working with third parties.

“An aspect of innovation is, how do we co-create? You can’t innovate in a vacuum and banks historically have taken a Field of Dreams ‘build it and they will come’ approach,” she said. “We’ve had to become more client-centric and to build to meet client needs.”

She added: “Our bold strategy is to become the ecosystem for global commerce. But how do you become the ecosystem when you’re a standalone company? That requires some collaboration. We need to think beyond Citi.

What we talk about internally isn’t just market share and origination, we’re focusing on the customer journey, measuring it in terms of customer pain points and reducing friction.

Andrew Kemp, Open Banking Lead, HSBC

With regulatory requirements and a changing market, to cope with that level of change, collaboration is necessary.”

To achieve this, Citi works with external companies that it believes will help it to create new products. Samuel-Ogbu said one aspect of this involves working with the bank’s venture capital arm to identify companies that represent good investment and partnership opportunities.

Looking beyond her own company, Samuel-Ogbu believes more input from fintechs may be beneficial for the regulatory landscape.

“I would involve the fintechs more. Regulators think about regulators, but I don’t think they think about how they solve the banks’ and their clients’ problems, and the optimal way of doing that,” she says.

“In terms of Open Banking, one of the things that we’ve tried to do differently is we were the first bank to register as a Payment Initiation Service Provider (PISP)and a thirdparty provider. That’s the stuff of fintechs.”

In June 2018, Citi became the first corporate bank to join the UK’s Open Banking regime as part of its strategy of enabling its business clients to receive small payments directly from their UK customers’ bank accounts. At the time, the bank said the direct client-to-business payment system would be cheaper than alternatives such as PayPal and payment cards.

The move was also part of Citibank’s broader strategy of turning itself into an Open Banking ecosystem in itself, Samuel-Ogbu said.

Even so, Coldrey said firms are likely to face challenges along the way as the industry builds the infrastructure it needs and companies form a cohesive ecosystem.

She said the use of the internet, data centres and cloud computing may lead to occasional latencies, time outs, cyber threats and the potential loss of data and control.

“The number of connections that banks and fintechs are making will test the infrastructure at every level, and we will see some growing pains there,” she said.

A matter of time Despite the criticism, there was broad agreement that innovation is just a matter of time.

“What you’re going to see is a lot more sophistication around applying machine learning to data to automatically manage your finances,” Clark said. “Products will start to take a back seat and services will become more prominent in managing your money.

Clark also believes the UK’s major high street banks may pull out of retail banking within the next decade, with consumers accessing products and services through Open Banking providers.

Companies that get it right will be able to tap a valuable market. “Open Banking provides that ability to have much more beneficial services. It’s a £12bn market for consumers to have better services such as better debt advice and more help for people with mental health problems,” said Devlukia.

“The things like debit and credit cards are great, but you need to know the difference to benefit from it. It’s about giving people access to services and information that let them manage their finances better.” ■

29

F E AT U R E / S M E B A N K I N G

A shot in the arm for business banking For years, small and medium-sized enterprises (SMEs) have felt underserved and undervalued by their banks, pushed aside in favour of larger companies that come with big fees, higher lending and larger balances. But things are about to change.

Jennifer Turton reports

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

Aug/Sept 2019

SME BANKING

A

recent white paper published by Banking Circle, entitled Financial Inclusion for Europe’s SMEs: Building a Circle of Trust, found that the smallest firms in the European Union are twice as concerned about access to financial services as their large and mediumsized cousins.

The research concluded that, without access to finance, a quarter of European SMEs would be forced to make staff redundancies, while 40 per cent would be unable to afford the equipment they need to remain competitive among their peers.

“For small companies, access to flexible and fairly-priced banking services still means the difference between increased sales and selling up, demonstrating the importance of financial inclusion,” says Anders la Cour, co-founder and chief executive officer of Banking Circle.

“The barriers identified by this latest research are making life more and more difficult for SMEs, but there’s also light at the end of the tunnel - with industry collaboration and creativity the vicious circles can be transformed into virtuous circles of provision, availability and use.”

The tides are turning for SMEs and with the introduction of Open Banking and PSD2 there is a real opportunity for them to demand more from a banking relationship.

Parth Desai, founder and CEO of Open Banking hub PelicanPay, says: “For the first time, SMEs have more choice and a new-found ability to manage their operations and finances thanks to an array of innovations.

They can access new products by alternative providers that are designed to respond to their needs.”

Separate research carried out by international payments, treasury management and foreign-exchange specialist Centtrip found 74 per cent of UK businesses believe they will benefit from Open Banking within two years.

The fintech’s study also reveals that 64 per cent of businesses agree Open Banking will save them time and 58 per cent believe it will save them money.

“Open Banking has huge potential to shift the way financial data is shared and managed, says Brian Jamieson, chief executive officer and co-founder of Centtrip.

“We are just starting to understand its benefits and the way it may reshape the financial sector. Even so, many business leaders have yet to reap its rewards and realise its potential to revolutionise the way businesses approach and manage their financial information.”

He adds: “Collaboration between fintechs and banks is the root to its success. By joining efforts, they can do a lot more.”

Over recent months, Banking Competition Remedies has been awarding grants to a number of banks and building societies specifically designed to develop and improve the financial products and services that are available to SMEs. Among the recipients so far are Nationwide Building Society, Investec Bank, Co-operative Bank, Metro Bank, Starling and ClearBank, all of which have received ›

For the first time, SMEs have more choice and a new-found ability to manage their operations and finances thanks to an array of innovations. They can access new products by alternative providers that are designed to respond to their needs.

Parth Desai, Chief Executive Officer, PelicanPay

31

F E AT U R E / S M E B A N K I N G

› amounts from the £775m scheme that was set up with cash from RBS as a condition of its bailout following the financial crisis.

Chris Allen, digital and innovation director at global financial services consulting firm Axis Corporate, explains: “Many of the awards reflected a preference for improving financing to the SME community, with winning organisations committing to increase the amount of lending to this sector.

We expect this to have a significant impact.”

Allen cites the recent Consumer Priorities for Open Banking report from the Open Banking Implementation Entity’s Independent Entities, which found that over a third of SMEs spend four hours per week chasing late payments, while the process of securing credit (and 36 per cent of SMEs rely on credit) is protracted and frequently fruitless. He argues that SMEs can expect many complementary services – cashflow forecasting, invoice capture, payroll management, accounting integration and international payments – to become commonplace.

He adds: “Potential solutions include new tools to enhance productivity and deliver insight on business performance; automated tools to optimise cashflow and earn returns on positive balances; improved and competitive access to relevant financial products and reduced costs on payments – international payments in particular.

“SMEs repeatedly say they want help with running their businesses and financial education. What remains to be seen is if they would prefer this to be provided by banks or an entirely new breed of ‘distributed banking’ providers.

Would you rather log on to your online bank to look for a loan or have your accountancy package suggest that you need one, find the right deal for your needs and take some of the friction out of the application process? There is a real opportunity for the banking sector to do more for small businesses, working with them to support growth and importantly help them survive during turbulent times.”

PelicanPay’s Parth Desai agrees that SMEs want Open Banking

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

to make their lives easier and free up time to focus on core activities.

“They are looking for simpler and easier ways to operate their business accounts, manage invoicing and improve their operational efficiencies. They seek time, efficiency and cost savings so that they can focus on their business objectives rather than financial management,” he says, but reiterates that the needs of SMEs are not being met consistently.

Potential solutions include new tools to enhance productivity and deliver insight on business performance.

Chris Allen Digital & Innovation Director, Axis Corporate

“Despite the emergence of challenger banks and fintechs, there is a gap between the increasing expectations of SMEs and what is being offered by incumbent players in the market.”

For Rolands Mesters, chief executive officer and co-founder of account data analytics company Nordigen, banks have long catered to low risk enterprises and private individuals first, and SMEs second.

“It’s no surprise why: banks are risk-averse by nature, and SMEs often fail. This is part of the reason SMEs in the UK and Europe are under-financed and rely upon venture capital, family funds and bootstrapping,” he says.

“We need to remember that banks evaluate risk well, provide good financial support for corporates and solve numerous financial problems.

However, there is always room for innovation. Nordigen, like many other SMEs in the technology sector, would love to see improved and increased funding options for tech companies – especially given that the sector is moving so quickly and represents scalable growth.”

Research by Finastra, in association with YouGov, shows an appetite for SMEs to engage in the new types of services enabled by Open Banking, as well as highlighting an opportunity for challenger banks to gain market share within this segment.

Mary Connor, director of product management, retail banking, at Finastra, explains: “One third of recent switchers in our survey now hold their main account with challengers. But these banks will have to work hard to keep them. 59 per cent of those that said they have switched providers in the last three years said they are likely to switch again as they shop around for the best service and value.

“It’s apparent that all banks will need to up their game to retain SME customers long term. This can only be good for entrepreneurs in the future.”

Dr Gavin Scruby, chief innovation officer at payments firm SmartDebit, however, has a word of caution: “We should never forget the old IT adage ‘customers only know what they want after they see it’. That applies as much to banking services as anything else.”■

Aug/Sept 2019

ADVERTORIAL

Oliver Dlugosch Chief Executive, NDGIT

I

t’s hard to escape the shake-up that Open Banking is having in the financial industry. Driven by digital-first consumers, new technology and changing regulation, it’s reshaping the future of services. But cutting through the hype and moving beyond compliance to identify road maps for strategic investment can be tough.

Some banks use Open Banking to merely publish Open APIs, so third party providers (TPPs) can access the data.

At NDGIT, however, we believe that Open Banking is much more than that, going beyond data to open up bank services and infrastructures. This gives bank customers the opportunity to carry out their financial business using new customer-centric applications from nonbanks, alongside their own bank’s e-banking services.

A global movement While local markets, attitudes and conditions vary, two main evolution trends are emerging: The first is driven by regulation such as PSD2 and UK Open Banking in Europe. Outside the EU, Hong Kong and Australia have also opted for this. The second is market driven - where there’s no compulsory Open Banking regime but a set of measures that can be used to promote data sharing in the banking industry by policy makers (such as MAS in Singapore and FSA in Japan).

Some countries, like Japan, are very committed to Open Banking: its FSA has obliged banks to publish open API policies and contract with at least one TPP by 2020. In others, like the US, however, there is no appetite for a common federal policy for Open Banking. Here major banks are developing API-based offerings, but screen scraping remains prevalent due to missing API standards.

Many are on a pathway somewhere between the two.

In Canada, although there is no current regulation, Open Banking is included in the federal budget, with plans to strengthen the financial service sector by providing support for payment innovation, enhanced data protection and new infrastructure. Similarly, in China, which is very advanced in terms of Open Banking, growth has occurred in the absence of any regulations or mandates.

Shifting to an ecosystem mindset To maintain this impetus and open global markets even wider, it’s vital that

all these developments and opportunities knit together and deliver on the ‘promise’ of freedom, choice and transparency to consumers. To achieve this, banks need to redefine their Open Banking strategy, moving from a compliance approach to ecosystem thinking.

In Europe, for example, tackling it from a purely regulatory-fit through PSD2 XS2A-APIs, is only enough to fulfil legal requirements. In order to deliver multibanking that offers account aggregation and account-based, value-add services to customers, this needs to be enriched.

This includes extending PSD2-APIs for partners with rich additional services based on account data analytics and other features.

It also means using open APIs to proactively offer complementary account, portfolio and loan data for third parties and true ‘White-label’ Banking.

By building lean API services on flexible infrastructure, banks can extend the concept of the FS ecosystem to support all their processes with and through truly integrated partner products and services. Only by doing so can they form the foundation of a truly customer centric ecosystem.

What benefits for banks?

As well as paving the way for new digital ecosystems, a joined-up, market-driven approach will put banks at the very heart of them. This will ensure they maintain their role as an ‘empowerer’ for both the industry and its users.

At the same time, staying relevant as everyday touch points for the consumer will ensure their value in the service-chain and their ability to drive new revenue and fee opportunities from TPPs. It will also enable banks to finally move from a ‘product-push’ sales mentality to proactive ‘needs-driven’ solution offerings.

It’s this final element that will allow them to realise the digital customer experience expectations which have been irreversibly set by non-financial organisations such as Google, Apple, Facebook and Amazon. ■ NDGIT is an API platform for banking and insurance, connecting banks and fintechs with digital ecosystems.

Download the new NDGIT white paper Open Banking Worldwide: The global evolution to networked banking to find out more: http://tinyurl.com/y3t2gv9b 33

Q&A

60

SECONDS INTERVIEWS WITH OBE EUROPE SPEAKERS EUROPE: READY OR NOT? As we take our seats at Open Banking Expo Europe, many organisations are breathing a sigh of relief following the European Banking Authority’s agreement to a limited extension on the 14 September deadline for compliance with Strong Customer Authentication under the PSD2 Payment Service Directive.

However, we welcome a C-level audience from banks – high street, digital and challengers – fintechs and regulators who are ahead of the curve and driving forward the Open Banking revolution across Europe.

To give you a sneak preview of what to expect from our accomplished speaker line up, here are 60 second interviews from a Lithuanian and Polish viewpoint.

Open Banking Expo Europe takes place at the Novotel Convention Centre in Amsterdam in 4 October.

For tickets and more information visit openbankingexpo.com/europe

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

Ruta Merkeviciute

Head of Division, E-Money & Payments Institutions Supervision Bank of Lithuania Q: Explain what you do A: I am in charge of a division at the Bank of Lithuania that is responsible for supervising more than 100 e-money and payment institutions licenced in our country. Most of them have the right to provide payment and other services at the pan-EU level. At a time when companies are shifting to a higher gear it is vital to identify the weak points and prevent them from becoming an issue in the future. I am also a member of Lithuania’s Payments Council group, which is responsible for the development of Open Banking in Lithuania.

Q: Why did you choose to speak about “The role of the central bank in driving forward Open Banking” at Open Banking Expo Europe?

A: The choice came naturally as the development of a fintech-conducive regulatory and supervisory ecosystem is one of the Bank of Lithuania’s strategic directions as well as fostering innovations in the financial sector. The Bank of Lithuania is one of the accelerators aiming to identify areas for the

Maciej Kostro Polish API Project Leader Polish Bank Association Q: Explain what you do A: I am organising the dialogue between banks and third parties and taking care of how secure communication based on APIs should look. I am trying to understand and to adopt all regulatory requirements related to PSD2 services.

Q: Why did you choose to join the panel debate on “PSD2 Open Banking API standards” at Open Banking Expo Europe?

A: Polish API standard is a very important part of the Open Banking European landscape. We are in the middle of a discussion and questions like “Can Open Banking ever

Aug/Sept 2019

Q&A

development of Open Banking outside the scope of the PSD2 and provide guidance to stakeholders on further implementation. We also see Open Banking as one of the tools to increase competition among financial market participants in our country.

Q: What are the biggest challenges your organisation faces in meeting the PSD2 deadline on 14 September?

A: Currently, the Bank of Lithuania is closely monitoring the market preparation for the implementation of the PSD2 requirements. The biggest challenge is to be on the same page, both for the regulator and market participants: we put a lot of time and effort into consultations and discussions so as to ensure that the requirements are understood and treated equally, readiness increased and Open Banking driven forward.

Q: What can the audience expect to learn and hear about during your session?

A: The audience will hear about the Bank of Lithuania’s experience and the role of a regulator in advancing Open Banking, particularly focusing on the part central banks play in accelerating adoption and management of the

really take off with more than one standard?” are tough but vital.

I have to face it!

Q: What are the biggest challenges the financial services industry faces in meeting the PSD2 deadline on 14 September?

A: Regulatory uncertainty, imprecise requirements and lack of customer awareness.

Q: What can the audience expect to learn and hear about during your session?

A: The European payment market is diversified, differences are apparent on many levels: digital maturity, adoption of innovations, the share of third parties, etc. I hope that the audience could expect a better understanding of these differences.

ecosystem and exploring the opportunities of open data.

Q: What do you think the financial services industry will look like in 10 years’ time as a result of Open Banking? Will much have changed?

A: I believe that the financial services industry will become more and more client-oriented and personalised. I won’t be surprised to see portable-data tools that would enable a client to access any financial service with the transactional and behavioural history of his previous products. This would help financial service providers to use Open Banking both as a tool to adapt products to the individual client, and for a client’s risk evaluation (KYC, historical transaction monitoring, credit risk, etc).

Q: What innovation do you see in Open Banking in the next 12 months?

A: As regards the PSD2 – I see the rise of players that were not direct participants in the payment system, such as accounting firms, combining their accounting products with payment initiation and account information services.

In the longer run, the incentives of Open Banking will especially boost the financial advisory sector and also spread to other sectors, such as insurance and investment services. ■

Currently, the Bank of Lithuania is closely monitoring the market preparation for the implementation of the PSD2 requirements. The biggest challenge is to be on the same page, both for the regulator and market participants.

Q: What do you think the financial services industry will look like in 10 years’ time as a result of Open Banking? Will much have changed?

A: Such long predictions are risky, especially nowadays. The banking sector is afraid of the position of Big Techs in the financial area and Open Banking could accelerate their attempts to disrupt the industry. But maybe banks should become IT companies with banking licences?

Q: What innovation do you see in Open Banking in the next 12 months?

A: Open Banking as such, is something new. We can argue whether it is a real innovation or not. Do I expect yet other innovations within Open Banking?

Of course, we have just started to define the foundations, now it’s time for new business ideas. ■

Polish API standard is a very important part of the Open Banking European landscape.

35

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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.

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www.computershare.com

ADVERTORIAL

Lee Usher Debt Advice Strategy Manager, Computershare Loan Services

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? Lee Usher, Debt Advice Strategy Manager at Computershare Loan Services, takes a brief look at the issue ahead of the London Open Banking Expo in November.

make the process of assessing affordability (for creditor, advisor and customer) a lot easier than it is now. Our industry should strive for more accurate affordability assessments and smarter ways to share this data, to avoid duplication for the customer.

Furthermore, 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. Sourcing cheaper deals for goods and services should be another pen Banking. It’s a mortgage industry hot topic, key area fintechs look at to help customers move into which is why Computershare is excited to be a part more sustainable repayment plans. of the London Open Banking Expo in November.

As the UK’s largest third-party mortgage servicer, We will be leading four hours of all things mortgages Computershare Loan Services is in the fortunate position and Open Banking, with some fantastic panellists and of enjoying a wide-ranging overview of the mortgage speakers lined up. sector. We collaborate with our clients on a range The focus will be on what this growing technology of issues and no doubt Open Banking will further means for the end customer. One of the main benefits increase in importance over the next 12 months. of using innovative technology in the financial services As a sector, we are in a position to work together to industry should be to enhance the customer journey help ensure that all customers benefit from the digital and to achieve better outcomes for them. revolution. Of course, there are likely to be commercial However, whilst Open Banking could indeed deliver benefits for those lenders who utilise Open Banking these benefits for a vast array of customers, there is a and it will be interesting to see how quickly these risk that some people will be digitally excluded. One of benefits are realised. I’m looking forward to the the key topics within the London Open Banking Expo discussions around this that will be how technology can will take place at the London address those challenges “As the UK’s largest third-party mortgage Open Banking Expo and faced by vulnerable customers, servicer, Computershare Loan Services is in encourage you to join in particularly those in debt. the fortunate position of enjoying a widethe mortgage conversation I’m excited about the ranging overview of the mortgage sector.” at the event. ■ potential for Open Banking to

O

37

Insight Faith Reynolds Independent Consumer Representative for Open Banking Implementation Entity

“The FCA’s survey doesn’t cover small businesses. One of the things that surprised us was the lack of small business data available generally to understand needs for firms to help target their propositions.”

T

he last couple of months has seen a flurry of announcements and reports considering Open Banking.

Key items to note include the Bank of England’s Future of Finance report, The Department for Business, Energy & Industrial Strategy’s (BEIS) Smart Data Consultation, the Financial Conduct Authority’s (FCA’s) work on Open Finance and ethics and the ODI/ Fingleton review of Open Banking so far.

All of them acknowledge the potential to drive better outcomes for consumers by unlocking the power of their data and likewise the importance of getting it right to avoid the risks.

It was into this storm of activity that we published our own report as the independent consumer and SME representatives for Open Banking: Consumer Priorities for Open Banking.

We focused on the needs of people and small businesses before exploring the potential value Open Banking could deliver and the changes that are needed to make it a reality.

We used the FCA Financial Lives dataset to explore consumers’ needs.

The survey is made up of 13,000 consumer records. The FCA makes the data available as open data and it is a great free resource for consumer insight. We looked at consumer resilience to small financial shocks and the use of unsecured lending, developing stories to explore the needs of our ‘avatars’ – pen profiles we could identify in the data.

The FCA’s survey doesn’t cover small businesses. One of the things that surprised us was the lack of small business data available generally to 38 O P E N B A N K I N G E X P O . C O M

understand needs for firms to help target their propositions. A definite gap in the market.

Overall, our analysis suggested people and small businesses could stand to gain £18bn a year from Open Banking, but this doesn’t include all the financial health benefits that could accrue from the increased visibility and control of our finances. With 18 per cent of the nation ‘overstretched’ and on the edge of crisis, Open Banking could be transformative.

Using our avatars, it became possible to see how Open Banking could extend its reach to people who typically seem unreachable because they are not online. Similarly, people who are asset-rich may have money tucked away that could be working harder for them, but they are less likely to be online and more likely to be loyal to existing providers.

Creating accessible and affordable interfaces that are more closely aligned to consumers’ preferences is crucial.

Small businesses need solutions that help them become more productive, borrow more effectively and get returns on their free cashflow.

If you’re on a bad deal with your mortgage or finding it hard to keep on top of your finances, Open Banking services could have a big impact. Other value drivers are cheaper credit and a better return on high balances and savings. Although there is an increase in firms using Open Banking for credit profiling, we haven’t seen much innovation in the products coming to market – there is real potential here for fintechs to do things differently.

Similarly, there is little growth in market solutions to help people make high balances work harder for them.

We put forward our priorities to provide a steer to the OBIE Implementation Trustee, government and industry.

Of most urgency is getting the implementation of the APIs working reliably and avoiding the cliff-edge created by the introduction of SCA in September. Looking ahead, it’s working out the governance of OBIE so it can extend the APIs to other products and enable Open Finance. Open Banking alone is not enough. Consumers need help across a much wider range of financial products.

Digital identity is a key enabler and could make journeys much more convenient and secure. But ultimately, a new regulatory regime needs to be established for data sharing to deal with issues like the onward sharing of data, liability and accessible redress.

The BEIS Smart Data Consultation makes proposals which could help.

Government, regulators and industry need to take action quickly to ensure the right governance is in place. We suggest the Digital Markets Unit could provide a role in delivering cross-cutting policy for data-sharing, while the Smart Data Function acts as its delivery arm for implementation. Open Banking could become Open Life. ■

➽ If you would like to comment on either of these opinion pieces, please email us at: editorial@openbankingexpo.com Aug/Sept 2019

Insight Todd Clyde Chief Executive Officer, Token

“Bank direct payments, for example, are already being adopted across multiple industries such as property, where they are speeding up and simplifying administrative processes and first rental payments.”

E

uropean banks have had the chance to learn from the UK’s Open Banking experience and we saw a flurry of activity in the first half of the year – signing new compliance deals with several European banks.

The lack of quality APIs is causing implementation issues and more work is needed to deliver easier access to banks for merchants and regulated third parties – one unified API, rather than the current myriad of different ones, will be the answer.

This was highlighted by research we recently conducted into bank API readiness. We found that 92 per cent of European banks had their APIs available for testing before the first PSD2 deadline in March but that a lack of standardisation is creating issues.

The overall outlook for Open Banking is positive but there’s still work ahead to overcome market fragmentation and make it easier for third parties to connect.

The start of 2019 was about compliance, but the second half of the year promises exciting strides towards true Open Banking. Consumers want more access to the frictionless payment services that we already enjoy with companies like Amazon, and we’ll start to see these at scale in our everyday lives.

Bank direct payments, for example, are already being adopted across multiple industries such as property, where they are speeding up and simplifying administrative processes and first rental payments. There’s also plenty of activity in mobile wallets, where using bank direct payments

cuts costs and time. 2019 and early 2020 are going to be the breakthrough years for payments – once the industry has mastered that we’ll start to see more ambitious use cases.

Token remains focused on accelerating the adoption of Open Banking standards globally and will continue to forge partnerships with banks and fintechs across Europe, the Middle East and Asia. This includes building on our partnership with Mastercard to drive premium API standards and deliver pan-European access to banks for merchants.

Following another successful round of funding we are also working on new digital money and ID solutions that will help modernise the world’s payment systems and make money movement cheaper, faster and more secure.

There’s no reason why all industries can’t benefit from Open Banking, and while financial services has been the biggest adopter so far, others are following. For example in retail, merchants are leveraging open access to data to create more personalised loyalty schemes and new payment methods like ‘buy now, pay later’.

But the really exciting stuff is yet to come. The next wave of adoption will come from industries that use federated identity services. Open Banking has the power to completely digitise ID verification and authentication processes which will be a key benefit for industries like gaming and gambling that are increasingly moving online. Open Banking APIs could be used by

online betting companies to perform instant customer vulnerability and affordability checks, as well as to digitally verify the age and identity of online players.

PSD2 was the catalyst for Open Banking and compliance APIs jumpstarted progress in payments. The question now is how we can move beyond compliance functionality and realise the full benefits of Open Banking. This is particularly important as consumer awareness grows.

Consumers aren’t just demanding more and faster digital services, they expect them. One of the main determinants of success will be how easily and quickly banks can innovate and deliver. Commercial APIs play a crucial role in enabling this and provide a way for banks to generate new revenue streams from Open Banking. They are quicker to deploy, offer a more sophisticated user experience and enable greater functionality, such as the ability to set up recurring payments.

Embracing third party providers of commercial APIs who have the technical know-how to provide advanced API functionality is the key to success. ■ Clyde is speaking at Open Banking Expo Europe on 4 October in Amsterdam. For more info visit openbankingexpo.com/europe Token is a licensed AISP. Its Open Banking platform brings PSD2 compliance to banks and access to bank data and payments for PSPs and developers.

39

GLOBAL SPOTLIGHT

Changing the face of banking Australia Focus Steve Weston Founder and Chief Executive, Volt Bank

A

ustralia’s banking sector is among the most concentrated in the world, with its ‘big four’ banks – Australia and New Zealand Bank, Commonwealth Bank of Australia, National Australia Bank, and Westpac – holding close to 80 per cent of the market for financial services. Despite being highly profitable and holding dominant market positions, the major banks face an environment of unprecedented technological, regulatory and cultural upheaval.

The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, which handed down its final recommendations in February this year, was the culmination of a long-standing campaign by customers to hold the banks accountable for a long list of misdeeds.

These varied from charging fees for no service, to unethical lending practices and cross-selling incentives, but at their core was a common issue – that the major banks had become too complex, were no longer customercentric and were run to maximise profits, rather than deliver good financial outcomes for customers.

While the Commission’s recommendations seek to repair the foundations of Australia’s banking sector, two closely-linked regulatory initiatives are also set to significantly transform the way Australians bank: the new restricted authorised deposittaking institution (RADI) licensing framework, and Australia’s longawaited Open Banking regime.

The new RADI licence is a pathway for new entrants to obtain a full ADI licence in Australia, providing a clear framework to develop the necessary resources and capabilities to meet their prudential requirements. The system has already succeeded in guiding one ‘neobank’ (digital bank), to a full ADI licence, with Volt Bank receiving the first RADI licence in May 2018, and subsequently its full ADI 40 O P E N B A N K I N G E X P O . C O M

licence in January 2019.

Australia’s Open Banking regime has endured a longer journey to its implementation since then-Treasurer Scott Morrison commissioned a review into Open Banking in Australia in July 2017. The resulting report, released in February 2018, made 50 recommendations for how Open Banking should operate, including the introduction of a Consumer Data Right. The Consumer Data Right will enshrine in legislation the notion that consumers are entitled to harness their data for their own benefit.

The Federal Government accepted these recommendations, and with broad agreement from the major banks and the fintech community, 1 July 2019 was set as the launch date for the regime. The major banks later succeeded in arguing for a phased launch, with 1 July instead seeing the launch of a pilot program, before the scheme is properly introduced in February 2020.

That pilot will see the major banks publish product data about credit and debit cards, deposit accounts and transaction accounts via an API to enable products to be easily compared.

The customer data flow will not begin to go live until February 2020, when card, transaction and mortgage data will be made available by the majors.

Phase three of the scheme launches in July 2020, when they will need to provide access to data pertaining to overdrafts, personal loans, business finance, leases, and asset finance, and smaller banks must begin

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

sharing card and transaction data.

Both the RADI and Open Banking regimes were introduced to increase competition, and put customer needs back at the centre of the banking equation. The former promotes the introduction of new banks which are unencumbered by legacy infrastructure and processes.

The latter will open up a world of possibility in terms of the range of services these new entrants can offer – from sourcing better phone, health and energy deals for their customers, to undercutting the incumbents on fees and benefits.

This is a very exciting prospect both for the new class of banks and consumers, but there are understandable concerns about what Open Banking means for data privacy and security. Government and industry will need to come together to educate consumers about the benefits and alleviate security fears. The first step in this educational process – establishing a Consumer Data Right, will likely be legislated in the very near future, after Australia’s first ever fintech minister Jane Hume flagged it as a priority for her first 100 days.

The culmination of government intervention and the introduction of new policy has contributed to the biggest change in Australia’s banking system in over a century.

Australian consumers now hold the balance of power and the race is on to meet this new and improved standard of banking. ■

Volt Bank is a neobank – a direct bank that is 100 per cent digital. Founded in 2017, it was the first such Australian bank to be issued a RADI licence.

Aug/Sept 2019

The Future of SME finance

SME FOCUS

Richard Kerton CEO and Co-Founder, Esme Loans

A

ccording to 2018 statistics from the Federation of Small Businesses (FSB), the total number of people employed in SMEs was 16.3 million, 60 per cent of all private sector employment in the UK. The combined annual turnover of SMEs was £2.0 trillion, representing a staggering 52 per cent of all private sector turnover.

Yet, despite their enormously important contribution to the UK economy, some of these businesses are struggling to get the kind of capital they need to grow and scale their businesses. Many are put off by the slow processes associated with applying for loans from larger banks.

The main reason for this is that the lending processes at larger banks tend to be heavily filtered – a business seeking quick funding will have to go through multiple layers or approvals before a decision is made.

This process is time-consuming.

SMEs and scale up businesses want convenience, fast response times, and more competitive and flexible loans.

months of bank statements, the next will ask for financial accounts and cashflow forecasts Ultimately, Open Banking coupled with AI tools will help make access to existing products, such as credit, debt advice or financial advice, far easier.

This is a real enabler for customers and businesses looking to scale up as it means a move away from laborious, manual, paper-based processes.

Open Banking will make finance more convenient, more tailored and much smarter. SMEs will be able to shop around for better products and be more demanding of the services offered. This will free up time to focus on growing and scaling their operations.

Open = personal It is clear that both Open Banking and digitisation are changing the way banks operate and provide services for their clients. Digitalised capabilities are

turning the customer journey into a highly-personalised one.

By utilising their greater access to data in an open model, banks and alternative lenders will develop a fuller understanding of what the customer or SME is trying to achieve, providing the right financial services at the right time in their journey.

Alternative lenders understand SMEs’ desire for seamless experiences, and their data insights mean they are able to build better journeys and customer experiences, instantly linking their marketplace or cloud-based accounting provider at the touch of a button. This eliminates the need for lengthy paperwork.

As alternative lenders leverage more insights from customer data, they become more effective with their marketing to SMEs, and are able to respond to enquiries in an agile way.

Going digital Enter alternative lenders. They have been able to effectively harness the digital revolution, utilising algorithms and access to data to cut loan approval processes to minutes.

As they are entirely digital operations with none of the costs associated with physical branches, alternative lenders are well placed to deliver these seamless services, as well as offering competitive terms. The advent of Open Banking marks the beginning of this overall journey into an exciting digital future, which will transform the SME lending space.

It essentially allows lenders to access key information, in this case bank statements, straight from the source.

Providing paperwork in an application has long been one of the biggest pain points for SMEs. Compounding the problem are the varying requirements of each lender – one may ask for three

“The advent of Open Banking marks the beginning of this overall journey into an exciting digital future, which will transform the SME lending space.”

A golden era for SME lending SMEs today are increasingly digitally literate. Financial players should reflect this fact. A fully digital end-to-end service, powered by automated data collection, represents an important part of the future of small business banking. This kind of offering is at the centre of the next wave of SME banking services.

Data transparency, speed, ease of use and personalisation mean the future is exciting for SMEs. If financial services can roll out the necessary technologies, the UK economy will reap the rewards. ■

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

Esme Loans is an online business lender owned by high street bank Natwest.

41

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

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Retail Banking

AI & ML

API Development

Virtual Account Management (VAM) software Solutions enabled by Open Banking and PSD2 connectivity

FCA authorised as an AISP and PISP

Data import for multi-banking

Data analysis for personal financial management reporting

Tailored cashback offers

Aug/Sept 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

43

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 l eading 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.

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

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

Aug/Sept 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: 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.

Email: enquiry@konsentus.com Company: Konsentus Ltd.

Telephone: +44 7785 388867

Contact: Brendan Jones

Website: konsentus.com

Konsentus provides Third Party Provider (TPPs) identity & regulatory checking ensuring Financial Institutions (FIs) are PSD2 open banking compliant. Delivered through a SaaS based solution using restful APIs with no set-up fee Konsentus operates across all 31 National Competent Authorities and works with the EBA TPP Register and 70+ QTSPs to ensure FIs never provide data to unregulated TPPs. Working both through partners including Mastercard, or providing services directly, Konsentus is the leading SaaS based TPP identity and regulatory checking solution in Europe.

Regional FinTech

FinTech events

FinTech community

Credit Risk

Decision Engine

Open Banking

PSD2 open banking Compliance

SaaS based, plug and play TPP identity & regulatory checking TPP identity & regulatory checking for ASPSPS

45

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: david.coghlan@openwrks.com Company: OpenWrks

Telephone: +44 7917 131478

Contact: David Coghlan

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

Aug/Sept 2019

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

Email: europe@plaid.com Company: Plaid

Website: plaid.com

API

Contact: Keith Grose OpenWrks make Open Banking work. Our mission is to help everyone understand what they can afford to invest, save, borrow and repay.

Using Open Banking, we make it easy for people to securely share their financial information with companies they trust, so those companies can provide better, more personalised products, support and advice.

We reduce costs for our clients by automating affordability assessments as well as increasing revenues by helping them provide the right financial products and advice, at the right time, for their customers.

Email: 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.

PSD2 compliance

API Transaction categorization

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

47

Hub

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

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.

COMMERCIAL CLARITY

TM

Email: info@whitecapconsulting.co.uk

Company: Whitecap Consulting

Telephone: +44 113 834 3133

Contact: Julian Wells

Website: whitecapconsulting.co.uk

Whitecap Consulting is a strategy consultancy based in Leeds, Manchester, Milton Keynes, Bristol and Newcastle. It is particularly active in the digital, technology and FinTech sectors, with Open Banking and PSD2 being a common theme across many projects. Whitecap’s clients have included banks, building societies, technology providers, outsourced service providers, FinTechs, retailers, universities.

Easy-to-integrate end-to-end Open Banking solution

Granular categorisation and insight engine

Purpose-built solution for affordability and creditworthiness

FinTech strategy consulting

Open Banking opportunity mapping

FinTech partnership strategy

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

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

Aug/Sept 2019

OPEN BANKING EXPO LONDON

BOOK NOW! W W W.O P E N B A N K I N G E X P O.CO M / LO N D O N

Be in a room with the innovators, disrupters and visionaries driving the Open Banking revolution Open Banking Expo 2019 returns to London on 13 November, bringing together the key players in the banking industry; from legacy players to challengers, and regulators to the most exciting fintechs.

FOMO? Book now to be part of it.

THE LAST WORD

Open Banking and Payments: A Ten Year Outlook Steve Kirsch Founder and Chief Innovation Officer, Token

H

ere’s an unpopular opinion in the Open Banking community: cash isn’t going away anytime soon. There are plenty of consumers who will be reluctant to go completely digital for the next 15 years. Maybe longer. Open banking and digital money, however, are already very much here. So, what will ignite consumer adoption, and when?

One year from now Over the next twelve months, the last few high-street banks that view Open Banking as merely a compliance chore will come around, as the revenue and use-case opportunities become more apparent. This will create increased interest from financial institutions in premium APIs that enable greater functionality, for which banks can charge a fee.

One such opportunity is the monetization of customers’ data. Even now, few banks realise that they can create premium data packages and offers and charge both service providers and other banks for access.

We will also see third party providers (TPPs) develop more effective personal financial management (PFM) applications that allow for actionable aggregation: moving money between accounts as well as viewing them within one app.

Beyond account aggregation, we can expect TPPs to produce better, deeper and more consistent data capture and analysis by consolidating data from merchants. The use of digital currencies for faster and more convenient global payments will increase too.

Merchants will also play a bigger role in consumer education. They will increase customer loyalty with more convenient payment experiences and a better understanding of their customers’ spending habits that enables them to personalise offers.

I also expect an explosion in Open Banking globally.

“The demise of off-the-shelf banking products may well take place around the ten-year mark, as improvements in banks’ customer data capture will have enabled full commercial roll-out of personalised financial products.”

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

Five years from now Say hello to a banking system powered by APIs. The use of premium APIs will be standard practice, preventing bank customer attrition through the provision of valueadded services.

Bank direct payments will give merchants more freedom to reduce friction in their customer experiences and more control over their cost of acceptance.

By 2024, the payment processing industry will have evolved, and acquirers and card schemes will have adapted their business models to embrace Open Banking. Identitybased commerce will become the norm for consumers, streamlining processes across industries.

I expect to see a number of central banks supporting an official digital currency that can be issued by any bank in the country, all fungible with each other without any counterparty risk.

The adoption of digital currencies will have increased, with a mixture being used by most consumers and enterprises. This growth in popularity of non-traditional payments will lead to changes in what we perceive as currency. A key development here will be the increased use of smart tokens, allowing secure and trackable transactions.

10 years from now Open Banking is most likely to be the de facto approach, with 100 per cent adoption by financial institutions.

Regulators will no longer need to mandate the use of APIs and ‘Open Banking’ terminology will disappear all banking will be Open.

Bank payments will have made serious inroads on credit and debit cards, and digital money will in many cases be used where cash is today. Payments will be more convenient, more secure, and cost even less to process. Neither cards nor cash will have disappeared entirely though.

The demise of off-the-shelf banking products may well take place around the ten-year mark, as improvements in banks’ customer data capture will have enabled full commercial roll-out of personalised financial products.

Once the industry has mastered Open Banking payments we will start to see more ambitious use cases. A whole new value chain is emerging, and the market will favour those with the vision to embrace it. ■

Token is a licensed AISP. Its Open Banking platform brings PSD2 compliance to banks and access to bank data and payments for PSPs and developers.

Aug/Sept 2019

13 November 2019 etc.venues, St Pauls, London

new

venue

OPEN BANKING EXPO

HEADLINE SPONSOR

Leaders

LONDON

Debate

More space to meet, network and share ideas with the most exciting people in the industry

5 stages 60+ speakers 400+ attendees 200+ companies 30+ exhibitors

Main Stage

HSBC

1. Open Banking and supercharging UK businesses 2. A journey through the eyes of Clearbank 3. Assessing the fraud risks within Open Banking 4. Underneath the Open Banking bonnet 5. Closing keynote from a legend

THE OBE HACK

Stage 2 Open Banking Unplugged Pitches from the latest fintechs changing the financial landscape

1. The gloves are off in the battle of payments 2. CASE STUDY: Through the doors of RBS 3. A CHALLENGERS VIEW: API first, bank second 4. Tandem and HSBC trailblazing consumer adoption 5. Challenge the traditional business model

Stage 3 Roundtables Led by an expert financial journalist to get under the issues you want to cover off most

1. Regulatory update from the OBIE 2. The future of the insurance market 3. CASE STUDY: Bringing Open Banking to Life at BBVA 4. HSBC and how to lead the API digital journey

New for 2019, drawing together desIgners, developers and innovators, Our hackathon will tackle real, world challenges

Fireside Chat

A more intimate less formal session to hear from the policy setters

P AY M E N T S S T A G E

New for 2019 we dive deep into the payments landscape OPEN BANKING FOR GOOD

MEETINGS Book them in advance using our match-maker app

Mortgages Stage

Nationwide and The Money Charity take the stage

Brought to you by Computershare.

Has Open Banking impacted the mortgage market as expected?

ONE DAY FROM ÂŁ649 I EARLY BIRD EXPIRES 18 SEPTEMBER 2019 WWW.OPENBANKINGEXPO.COM/LONDON