The Connector Podcast - Webinar on open banking - open finance

The takeaway from this session is that open banking, or the open data economy, is possible and can benefit consumers. It needs to be managed correctly, with the right technologies and user consent management at its core. Open finance is not just about data sharing but also about collaboration between different parties and leveraging new technologies such as privacy enhancement and consent management to ensure that data is secure. Open finance is an opportunity for Europe, but it needs strong support from all sides to succeed.

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Koen Vanderhoydonk
koen.vanderhoydonk@jointheconnector.com

#FinTech #RegTech #Scaleup #WealthTech

Remco Veenenberg 2:16
Let's just kick it off. So everyone in the waiting room Welcome to our panel on the main challenges of open banking organized by the connector and our partners Finco and OB bank worldline and data village I have to critical note to all the attendees you will all be called Kuhn vendor hook this is a technical issue so from now on if you don't mind you will be coming vendor okie will be erected influencer. Or if you want you can change your name to whatever you prefer. I'm going to go over the agenda shortly. I would like to introduce the speakers and it's the beginning of the session. So you'll get to know each other and you have a good impression of who's here today. We have an interesting mixture of a tech provider, someone working at a global FinTech company, we have someone from a global FinTech consultancy. And we have the CEO of a bank. So we have different perspectives to address the questions of what are the main challenges of open banking, then I would like to open up the general discussion. For this, I'd highly encourage you to use the chat functionality, because we will have time for q&a. And if an interesting question comes through, I will try to make that into the panel discussion as I try to moderate it as smooth as possible. So thumbs up for the chat function. I would like to give a brief introduction for everybody. And I will start with very global with the co founder of data village. So fabric tells tell the audience something about yourself.

Frederic Lebeau 3:44
Okay, nice to meet you. And thank you very much for the invitation. So yeah, I'm co founder of data village company started in 2019. And my main background is in financial industry, working a lot on the open banking a few years ago.

Remco Veenenberg 3:58
Thank you very much Fredrik, then I will give the breakthrough in acoustic

Inna Kostiuk 4:03
Hello, everybody. I am a global partner manager at word line and depend expert. I am mainly working with merchants and partners. So I'm searching for new partners and grown business partners and to do our retail business even better, and to have embedded payment there.

Remco Veenenberg 4:26
Thank you very much. Now we'll give the word to you, Bronco.

Branko Greganovic 4:29
Hi to everybody. I'm Bronco. And I'm running. One of the banks of the NLB group focused on ex Yugoslavia region. It's a typical incumbent bank with all of the all of the challenges attached including the challenge of open banking. So I really look forward to discussing that today.

Remco Veenenberg 4:53
You're very much blanket and looking forward to your insights. And then last but not least, you're gonna bail me sounder from fincorp Listen produce yourself.

Jeroen de Bel 5:01
I have one pleasure meeting you. Oh, thank you for having having me ARIA info. I'm the founder of Finco. A consultancy specializing in digital banking whereby we help our clients being banked to innovate and transform their organizations. Whether it's optimizing existing organization, we're building out completely new digital ventures. Among the topics we look at is open banking as such, excited to join this discussion.

Remco Veenenberg 5:31
Yep. Thank you very much. Glad to have you here. Prior to this panel discussion, we did a poll on LinkedIn. And we actually asked how does the new data governance act or otherwise called the DGA impact financial institution? And amongst the poll results, who said we found a 10% set, no significant impact 5% said moderate it's just a small project at this point. 50% said severe there are many open questions related to the DGA. And 45%, is actually never heard about the DGA. So if the topic comes along in the in the panel discussion that I hope that the 35% gets to learn a bit more, and I hope that the 10% gets to understand that that will very likely have a significant impact. So let's kick off the panel guys. Here's an overview of all of the topics for today. And the first question is, and that is actually already statements. Why is Open banking, not successful in Europe? And what are the main challenges for open banking these days? And I would like to point out the first question to you

Jeroen de Bel 6:33
Sure, happy to, to share my thoughts interesting and growth questions, less statements. First of all, I think we can argue whether it really has not been successful. I think perhaps, our expectations for the short term were a bit inflated. But I see for the long term, definitely changes in industry, with users taking off as well as infrastructure investments happening, feeding into also a bit of finance that we may touch upon later. So I think under the hood, many things are happening and bracing the users or users are taking up. When it comes to the changes, technical standards. That's one thing along with the strong customer authentication, I'm not fully into all the latest details. But if it's true that you have to renew every 90 days, well, that's that's a nightmare. And limits the usability business models is another way to look at it, it's what are the incentive for banks and others in the industry to actually share data. Nowadays too much, it's still one party investing, making data available, others taking the benefit. So you want to look into making that more alive. And lastly, I think it's also about the habits of people that need to or to take time to change takes time for people to see the benefits to adjust their their way of doing things and also tapping into open banking solutions in

Inna Kostiuk 8:15
that end. From my parents, are you looking for a bit from the merchant perspective as well. And from the business itself perspective, we also see that market doesn't have kind of the same level of technical performance as you as you mentioned, or modern. We have different limited availability of API and everybody stated that they have an API, but it's not really comprehensive and sometimes bank Kuben especially more reluctant, so the reserved, redeem delay on timing, and, and also the treatment, the fragmented regulations, because each, regardless if you has a global regulated policies, but each European country has their specifics, and sometimes to have it across Europe is not always easy. And I believe Branca, you really more than agree on the data you have probably more to add into it.

Branko Greganovic 9:21
Yeah, it's a it's I think we should be careful not to reduce the banking to PSD to I think that's a much wider concept. In a sense also, in that sense, also much more important concept of an hour. How does banking look like in an API universe if you want in an in an in universe in which banks and the whole economy is connected through through API's? And this is something which we may want to mention At the growth of the open banking, and the whole open economy is constrained by the lack of standardization of API's. And there are a number of initiatives in the market about that. And I think they are definitely one of the main drivers of change and requiring support also, from everybody interested in developing this universe.

Frederic Lebeau 10:28
On my site, I really liked the the two things you mentioned really ruin about the business model and the lack of business model. Can I do believe it's also combined with the the friction in the user journey, especially in regards to that consent, I seen a lot of initiative stopped, because, you know, the business model is not strong enough compared to the friction in the in the journey for for consumers, especially regarding that the duration of the concept. So, so that's, that's, for me, clearly, one of the reasons why open banking is not as successful as expected today.

Remco Veenenberg 11:09
I think we've already touched upon many different blends here. I mean, the 90 days consensus time is actually limiting this very severely, in my opinion. Also, what's the union pointed out about the business models, which are not really that valuable, and also the insensitive station, we also touched about that. And we also already touched upon API. So we have lots and lots of content to go onto, which actually moves us to the right question, I think to be asked next, especially when we talk about business models, and incentives, and incentives. And that is, is Europe ready for open finance in open data economy. Now, to give a clear definition about open finance, I believe that open finance is basically open banking getting matured. So open banking, basically, using only transactional data, open finance will move us to a world where a bank is able to access third party data, and also other sources of data, such as behavioral data or health data, in order to allow for highly personalized banking experiences in which will open up new business models and also open up new revenue streams. But some of the topics that have already been highlighted, greatly limit this. So what do you think we're gonna go? Is Europe ready for an open data economy?

Branko Greganovic 12:22
I think that, put it into the time perspective, it is ready, you know, of course, problem is what what is the timeframe that we talk about this changes tend to have the exponential growth pattern. So you know, until I think there is a book which saying, you know, until it moves to the the other part of the check board, you know, chess board, it's, it looks like it's moving nowhere, but there is inflection point, but it explodes. And then if you're not ready for that inflection point, you are basically led and you can be out to the market very quickly. So I think that definitely the the open banking, the API economy, the API integration is definitely going to be one of the main marks of the future financial system. And that, you know, the slowish sluggish, if you want movements at this point in time are more a sign of the exponential nature of the exponential growth than anything else. So we specially be incumbent should better be ready, you know, and should better react and behave as if the open banking is still already here, simply because that is definitely a part of the future. It's a future business model. And once the learning curve jumps is going to be too late to react.

Jeroen de Bel 13:53
Yeah, I agree with with Bronco, it is happening, it is the future is is you are ready now well, you can argue a lot of steps need to be taken by industry and by individual parties. And I see it as an evolution as a player activities industry. You want to continue working on this, make yourself ready. And once one step at a time build towards this open findings from this open data economy.

Frederic Lebeau 14:23
What's what's interesting also, is to look around I would say so not only in the finance industry, that's something I learned the last two years. So definitely Europe is trying to be ready. So Europe is really putting everything in place to be, let's say the, the place where open data economy will happen. So typically, we mentioned at the starting point, the data governance act, so really enabling, you know, data sharing, and it's it's not only in finance, you know, it'd be on finance and there are now a lot of initiative in Europe. I'm in retail, in media, and in a lot of industry that are also looking about open data economy. So I think Europe is really setting the foundation from different angles, technology, but also regulation, obviously, because we are quite strong to do that, to enable that, but the point is that it's really horizontal. So it's not vertical only on finance is really a horizontal approach at the European level.

Inna Kostiuk 15:29
So we are talking about the business model of open data economics, it's actually quite conceptual change of business model, because there would be different players just for collecting data. So it's not just like banks, financial institution to the government as well. government institution is the one who others who are giving the consent to collect to be too loud processor data. So it's users like us, then it would be some value added services, startups, the organization who are working with it and created the service and the business. And between all parties, one of the biggest challenge or like, the barrier I see is trust. Because all of them, government cannot really put all data out by just if it's decided as one country. So it's going to be global move, or non users, especially who are a bit more educated, they're really more and more concerned about their data. So and then we are getting into the position that the business model fully cannot function. And we have a bit of jumps in all signs. And in Zanza, like new startups, like which are using the approach of open AI, or open data source, the kind of function some ways they succeed, but it's not like really full aspect, I think it's really going in order to that open data, economic start to function that will take some time, because the adoption and mindset and the trust and benefits which in the consumer could get it, it will take time, when we'll see. So please get that for me. So I would be very concerned with my God, my government would give data everyone even to make better for me. So then it's would get a lot of question for fraud prevention for anti use anti abuse of my data, etc. So probably much more questions behind this. And just to be ready to have this open data economy, how we can benefit from it.

Remco Veenenberg 17:45
Yeah, I think I think that's a very good point. I think that we've we are already touching about, let's say potential breaches security, and also user consent, which is fundamental for open finance to mature, which is also a question that I think I would like to point out to the entire panel, but I will start with you, Frederick. And then I would like to move on to Polanco. The question from the audience's actually touching this, the banks in Europe are concerned about competition and potential breaches to the personal data in line with GDPR. How do we respond to that from an open finance perspective? Because you are the expert on user consent management?

Frederic Lebeau 18:24
That's a very good question. Because there are two points that question at the same time, it's about the fear of, you know, losing control the competition, and also how to manage the consent is the right way, meaning according to the regulations, and that's typically the two main point when we talk with institution, financial institution, but also in other industry. These are the main two reason why organization does not are not willing to share data today is mainly for the to reason. And to answer that question. So there are obviously different angle to address that. The first one is about moving from data sharing to data collaboration. I know this is a topic that come later in the discussion, but I think is the right time to talk rapidly about that. So it's a shift, but it's a shift that's now moving quite fast. It's about you know, not leveraging on API is such about moving and copying data from one entity to another, but really triggering collaboration between different actors. In one place, I would say, to, to run algorithm on this data, but in a controlled way. So here, it's more about making sure that the data will not beat league across different organization. That's one way and what we see also from a pure technical point of view, and it's strongly pushed now by Europe as well. It's about leverage Seeing new technologies such as privacy enhancement technology to ensure that there is no leakage. That's the first thing. The other thing, it's about consent management, obviously, that's the main challenge. And we see also things moving. So just before in our you mentioned consumer control and more control about the consumer, they are now technology also supporting that. And typically here in Belgium, you have a little Fleming government, who is betting a lot on the on a technology called solids, which is a consent based technology to give much more control for the consumers, but also much more, let's say, user experience, better user experience. So you can imagine like, you know, privacy center where user can manage cross consent across different use cases. So if you combine the two, you bring much more control to the individual, but also to organizations that are looking to share data.

Branko Greganovic 21:03
And for if America, the, the personal data challenge is definitely one of the main bottlenecks of the development. And that definitely has to be sold not only the management of it, but also the ownership of it, we'll see what in what direction is that going to develop, including the possibility of monetization and what have you, you know, in that in that domain, I think that the chronology here will definitely help. And at some point, we will find a way to balance the user experience, convenience, the seamlessness of a service, with the right for concern, related to the personal data. On the other hand, until that happens, we should also not reduce the open banking data just to personal data. It's is enormous wealth of other data, which is accessible in a way, which is facilitated by this API integration universe can be used to really improve not only financial services, but any service and any product we have around. So generally sharing data, or opening up data is really an important concept which we should we should promote, and use to improve our services. You know, until the this private data, personal data challenge is solved in this rather way. But we do have a lot to do in the meantime, it should not wait until this personal data challenge is solved before we really embark more ambitiously into the general generic if you want open finance open economy challenge.

Remco Veenenberg 23:03
Now in or do you have some some some use cases where you see benefit, let's say from using other sources of data than just as I say personal data or transactional data? Do you already see that happening of worldline? For example?

Inna Kostiuk 23:17
We do see, definitely, it's not directly in my business in my merchant services vertical, it's more in financial services, well, my colleagues have a particular product called line inside credit scoring. So that's really focus for banks to improve to this facility to get the credit, and also from the retail perspective, they kind of want to reply to the demand of consumers to have buy now pay later options, but they put themselves at risk because sometimes they might not never get receives the funds. So what they have, okay, we want to accept that option, alternative payment method, okay, but how we can ensure that we will get this money so they need to have a certain scoring of rescoring already in building are integrated with that payment method in order to have pre authorization from processing companies that will have money. So everything has to happen very prompt. So, you know, if you buy new headphones for three months, and it's in payment, you want them now, but you don't need to collect lots of documents and to bring it to online shop. So you just choose option Buy now pay later, but the merchant online shop want to be sure that you are going to be able to pay for that. So such really use cases when sometimes it's not really big amounts, but it's very important to have that guarantee. So and in this sense, we use the open data, we also use our internal scoring. We have different type of product of features for such type of demand, of course.

Remco Veenenberg 25:17
And then you'll know Do you see some of the biggest use cases in open finance, let's say, what would you imagine being like one of the top notch products that would come out of an open data economy?

Jeroen de Bel 25:30
Yeah, there's difficult and good question. And that brought but if you look at the long term, it's all about everything flowing seamlessly, or interconnected that it's not that you don't have a bank and shopping and such, but it's just all integrated. And when you bring it back to the here, now I see it more in the context of your credit scoring that companies use open banking to allow clients to seamlessly fit in their data into the systems as opposed to manually uploading documents. Another area that's very big, obviously, is email. for other reasons, but they are also you see, more and more parties shifting away from sort of the traditional rule based approach only two also are more and more looking to alternative ways to to, to identify the risks. In the Netherlands, also a recent case between bank and that central bank was about that, I think still still seals long waist long way to go in that area. So we'll also get the full potential. It takes some time steps, as you see across these areas, all sorts of examples. And we're gonna organizations trying it out, I haven't seen it materialize yet or mature it in a way where we feel okay, it's all ready, but they are working on it.

Remco Veenenberg 27:09
Yeah, clear, clear, then I think we can move on to the to the next question. And I think we've already, actually, I want to sum them up, because I've already heard like many interesting touch points. So if any of you would like to elaborate on any of these, I would highly encourage you to do it. Now before we move to the next question. I think the main challenge that of you've already summed up here are quite comprehensive, right? Which is how are we going to overcome the 90 days consent time, which is a huge limitation to the business model of open banking? Which would also relate to the question, perhaps we need to standardize regulation across the EU that could remove these kinds of barriers and actually give users for political control over their consent management, which will actually probably solve this issue. And we have already had it over technical implementation or problems we handed over data breaches potential fear for this. Is there any main challenge that the panelists think that I'm missing here, I would like to APIs,

Jeroen de Bel 28:11
I would like to come back to the business model on incentives also saw on the left corner of my someone commenting on people's risk perception, miniature of this, this whole holy grail for customers, it's about the benefits versus the potential cost potential risk. And as well, sort of speeds of using open open banking type of solutions. And for institutions, it's about the benefits of making such data available. It does take some investments. And I think in the long term would be interesting to look at more sort of a system what we also have in place in payments, whereby it's sort of a give and take and also benefit for just being the data provider and such. And that allows to get all sorts of data models around it.

Frederic Lebeau 29:09
If I can react upon that, that's that's clearly a limitation or of open banking, I mean, bank have been forced to for free, but not for free, but they do it for free to open their data without at the end, anything in return. So so that's one of the thing by stop fully correct, but at the end, that's, that's more or less the truth. So that's clearly something that needs to be overcome in the future is also to give something in return to to to financial institution, and as you mentioned, could be also in data of course with the control of consumers but could be also in data and typically, data from other industries. So crossing with uppercase data, all these kinds of things could make a lot of sense. So be directionality is important. And from my point of view, I do really believe that regulation, vertical regulation is not the young, the single answer to open banking, opening to other industry through horizontal regulation coming back again, cerebrate to the data governance act, DATA Act. So all these new coming, that's really key because it's really horizontal. And it's really there that we will see an enablement of, you know, this B direction, way to share data and not only one vertical who is looking to open the data to others. So that's, for me, one of the key things in the future of open banking.

Inna Kostiuk 30:44
For me For if I can add for incentives for banks, from one hand, indeed, it looks like the incumbent, been just obliged to share their data. And it might hurt and especially like, few that they just come in and Daikon but on the other hand, believes it is there are a lot of opportunities for them to start collaborate with third party, and which actually helps them to be innovative. I know that in banks, in reality, to have some changes, it takes a lot a lot of time because work line also is it's a big ship and changes takes time. But to have this access to search parties who are actually kind of sometimes FinTech or tech companies who are much faster, doing things and have a collaborative response from them could really impact the customer satisfaction could actually highlight the area where probably better to tackle to start calling for banks and where to go for for revenue increase. So long term, I see quite a lot of opportunities, although on the short term, and currently on the moment of change, like or it's also it doesn't seem to be so it's so easy.

Remco Veenenberg 32:04
Yeah. And that's, that's exactly the question that I just just got from the audience as well. And I think you've already elaborated a little bit on that, you know, I will ask that to you, Frederick. And then I will ask that you Bronco, can you give me any examples on how banks can monetize some open banking, some real life use cases that are actually, you know, increasing revenue for them?

Frederic Lebeau 32:28
It's a good question. So I know I know one quite well. So it's a it's a use case, mixing retail data and bank data. So it's a bit of a b directional use case where the financial institution can monetize data by combining with your purchase data, and bringing, you know, customer, customized cash back automated cash back to consumers. Also going beyond cashback, it's all about predictive bookcase and all these things. So that's a way to monetize data. I'm a strong believer that data monetization does not mean selling data, but it's really more about getting value out of the data. And for me, that's the best example I have today, which is a real concrete example. It's not based in Europe, so it's outside of Europe. But that's a very interesting example about monetizing data from the bank, but not alone. So there is there is something in return as well. So it's about combining data. And complicated give some examples. Yes. The

Branko Greganovic 33:43
open banking led the bank really increase the quality of their services. For example, we of course, are also US banks are mainly focused on non clients using the access to the bank. But on the other hand, the API's and open banking concept gives the bank to improve their integration with existing client base and with the client base where there is no such not such big issue or it's already regulated issue of consent. So the integration of the bank with existing client base and improving the service is based on open banking technology including moving into embedded financial services, integrating yourself into your clients business, letting your clients basically do self service banking and improving overall user interface interface and this seamless seamlessness of the service is something which cannot be achieved the by non open banking technologies or with open banking technologies you can do you can produce services, which are uncomfortably more valuable for the clients than with the traditional technology. So it's a completely different room, it's a new room is completely different business model. And with it, of course, there are also new revenue models, which are made possible with the Open, open banking, open finance, technology, so is lot of monetization possibilities, not related, again, to a particular product by by changing the whole and adjusting the whole business model, you get into a completely new revenue stream type of structure, which is currently not available, and it has the future, as opposed to what we do today. And how we do it.

Remco Veenenberg 35:53
Absolutely. When you can elaborate on that, given your experience that you've built many digital greenfields banks and been involved in many digital transformation projects at larger incumbent banks, what would be your top of the line use cases when it comes to monetizing open banking?

Jeroen de Bel 36:08
Yeah, a lot has been set already. And I think there's sort of two main categories one is about value adds and then you have additional functionality you charge your users for. So you see some banks doing that with reasonable but limited uptake. Second one is the standards. solutions like managing your expenses, subscriptions, and then referring to an alternative provider and get a distribution fee there. So I think Devon is generating revenue or beats again, also with mixed uptake. When it comes to another area, I think we haven't touched upon this. And if we change the perspective, from revenue to more like value generation, I remember the early days of open bake in the UK, there were many alternative providers out there payday lenders, and such a one party gets that's come to my mind right away is what's called safety net lending. And what they were doing was money management app and tracking, finances cross accounts, and their surface was basically, if you go an overdraft, they will lend you the money. So that they themselves can issue more loans and use customer avoid all these hefty overdraft fees in in, in the UK market. And alternatively, also they managed and they nudge customers to automatically repay once they have funds on the other accounts. So also they actively manage the risk of the customer. So I think those are both interesting sides to look at as a bank, how can you leverage it to create more value for your customer, as well as for yourself, increasing your business, and also managing the financial resilience of your customer, particularly in these days when inflation and other issues are emerging? That could be more pressing issue. And also there, you can make the customer better off as well as the bank. Avoid any any losses from loans.

Remco Veenenberg 38:26
Yeah, that's actually a really good question. Really good point. So you also actually really pointing out let's say, nurturing and actually improving the client's relationship, let's say, through through the services. So I guess that's from that point of view. Bronco, you could say that, by leveraging open banking effectively, you could essentially build a stickier relationship with a bank and keep them longer with you. Do you agree with that?

Branko Greganovic 38:49
Absolutely. And now we're talking about, you know, self service banking, which can definitely be facilitated through open banking, technology, including, yeah, the all of the scorings and ratings and support in all of the processes of the regular traditional products. And on the other side, that's what I mentioned before moving into an integrating yourself with your clients, business processes, ie, the embedded finance. So embedded finance plus self service banking already for existing client base, I think offers enormous business potential for incumbents already. If they of course change the mindset, which always is easier said than done.

Remco Veenenberg 39:38
That's a good point. Would you like to comment on that, you know, how do we change the mindset?

Inna Kostiuk 39:44
Easy one, right? Well, to change mindsets will take time and probe probably not not very sure. But when I when I'm reflecting on banking, we do How's the like, quite actively growing now banks. And we see that who the net bank score does claim to be fully digital. Now sometimes thinking to open the maybe branches, maybe there are there. Because for them as well as a she's at importancy, too. Be in touch with our clients to serve the client, sometimes you just have to meet them. And yes, it might be different versus commercial client, or does physical client or company with whom you embed your payment or your finance, it can be different completely, but they still thinking about it. So for me, it's, it's like in retail, you cannot say because of COVID. Now everybody is shopping online. Yes, online is growing, but the physical stores are still there, and they're not going to go anywhere. So banks, yes, we have a lot of cell service. Yes, we have a lot of digital, but there are still some branches going to be existing. And there are still going to be needs for neutral, neutral, some relationship to meet with that to meet with clients to discuss things. I see it's more getting into mix. And yes, heavy mix on digital, of course, but the physical presence, it's always gonna stay important because people buy from people, people agreed on people trust. And this is trust component is a key. And as a salesperson, I know if I don't trust the person I buy, it's pretty hard. So I think begs the question how to change mindset, this link goes slowly step by step. But creation of the trust is a kid.

Branko Greganovic 41:51
I've been just jumping into, say a change of mindset, because an important element and that is the top executives, the top executive team has to understand the basic logic of the technology. And that's what's lacking at the moment, a lot of times, it's really a major obstacle to any kind of mindset change, because they cannot imagine what needs to be done. If you cannot imagine, you cannot realize

Jeroen de Bel 42:16
I would like to bring another perspective to the table, I think two valid points. It's about the customer and omni channel experiences mentioned, combined with the trust and management another area, I'd like to take my mother as an example, she's now using these apps to to get an overview for pharmacists, she's more active with those digital solutions than myself. And actually we are all this this week, I spent too much on my groceries or such and checking into that. Or since using this this other solution to change utility providers because well with gas prices, that's now very important. So we have to click she changes that. And because it's a simple for her to use and be because it gives a specific benefit for her. That's where she starts using those specific use cases. And I think that's what it comes down to try to make it tangible and give specific benefits for for users. So it's a generate StopTech.

Remco Veenenberg 43:26
Yeah, yeah, I think that customers will only be okay with the personal data sharing if they sense this value creation that they are profiting from it as well. And I think this is a really good point you were in which you highlighted here, I only managed to convince my mom to start using revolute, when she's found out that in the United States, you cannot actually pay anywhere because a Dutch bank card is a debit card in the juicing and Maestro card scheme. So yeah, then you're pretty much screwed if you want to take out some cash. I think that's we also touched an interesting point here, which is trust. And recently, I was at a presentation about the German FinTech market where trust is still one of the key pillars for people to actually conduct business with any kind of FinTech or any kind of institution. If there is no trust, even if the app is fancy looking. There will be no, there will be no business conducted basically. So and that also goes back to some of the earlier points that we've touched. Right that that is the user consents overcoming this. And I think that's one of my key takeaways so far right now is really the big challenges to solve, let's say, and to really show the end user and the customer. The benefits of this data sharing with full protection, and really showing them what kind of value is being created. And the mindset at the bank obviously has changed as well. But I think that we'll go step by step. Then I have, there are still many questions that that I would like to ask as the panel. There's anyone that wants to put in anything related to the last points that I mentioned.

Frederic Lebeau 45:01
Yeah, but about the consent, that's nearly something or a. I mean, that's everywhere. I mean, every not everyone knows the cookie consent is a nightmare as well. So consent is really is really a challenge. I'm not sure it's all about, you know, having a strong consent management system, bringing all, you know, the granularity for the consumers, that's I don't think it's the most important, I do believe the most important is to make it really frictionless. So giving you a way to consumers to, to engage without any friction, but at any time giving them a way to know what's happening with their data. So it's, it's on both sides. So being frictionless, but having the the opportunity, if I want to know, I'm able to know, and then you have the best of both worlds, the very nice user experience, but a strong way to trust not to get trashed from consumers. So consent is is a difficult one, it's really a difficult one to make it to make it user friendly, I would say.

Branko Greganovic 46:22
Maybe we should also mention that, you know, there is a flip side to consent. And that's the responsible behavior of the financial institutions. Because in these situations, we are expected and asked many times also to protect our clients and be active in that. So I see that going hand in hand and the show showing that you do have the best interests of your clients, in your mind may also be one of the main facilitators of finding the right balance between the good product and the consent of the client.

Remco Veenenberg 47:10
Yeah, but I think I think touching upon verdicts point as well, I think we can solve a lot of the users complete visibility and complete control over what kind of data sources or what kind of data is shared, in exchange for what kind of products and also touching a little bit upon what your room just said was, was very, you know, easy, but very easy to understand use cases also for different, let's say, segments. Yep. For example, peer to peer comparison, which is of your gas provider, or energy provider, or internet provider, is actually cheaper and make an instant switch to your banking app that has instant value, or a simple use case of, you know, showcasing upcoming subscriptions and actually showing to people you're actually paying for this every month. And with one click on the button, you can cancel this are getting the right sort of insurance based on your personal health data if you're willing to share that, of course. But if you get a much better user experience in return, I do believe that user consents can be convinced. And I definitely think that also perhaps in here, you can elaborate a little bit Do you believe that? And it's been proven that also across different geographies. The study in Asia was conducted that pretty much 80% is willing to share data in order for better experiences. But do you believe about that? Do you believe that there's a big difference between Generation Z and older generations when it comes to user consents regarding your data?

Inna Kostiuk 48:32
Yes, I really believe there is a huge difference between generations between different regions. And it's driven by the market adoption or market maturity if you want on the way and the general level of education or financial inclusion. So if we take a nutshell look, look in Africa there is the biggest number of unbanked population in Africa Of course, when talked to the people, or does it area about consent they it's not relevant for them right. But on the other hand, in Africa, we could see the one of the best ks M PESA in the world the fastest adoption transaction of the money why telecom operators we don't see anywhere else, just like this, they're just leapfrog everyone on that just because it was super right time and product market fit on that. Luca in lotta halogen America is growing now. As well as they have quite a big population and the bank and all they're also quite concerned about the cost of transaction. So all type of FinTech Neo banks are growing Zehra with minimum digital knowledge and digital inclusion. People are really a happy to adorn to adopt It's all possible solution and there for that they're ready to give all possible consent for them. If you look on Europe, in American, so the market demands develop. So with the most mature markets, we have our conferred risk credit card, we have our comfort with traditional bank, we have all conferred with the way we are doing governance, we are living go live, why do we really need to give a consent? What is the benefits of people asking completely different questions in their hand before they're getting that step? And I think somebody was mentioned, like, the people would be ready to to share data if they see the value, of course, but in Europe, it's much harder to bring them this value because the left financial level of markets and adoption and services already quite high, it's it's very hard to convince them, okay, give me this, maybe you get a bit something more. So it's not going to be easy, or we cannot say that, for everybody involved, it's going to be the same approach is going to be different based on based on realities, and of course, different generation or have different different way of doing their finance. Yeah, no, no,

Remco Veenenberg 51:19
absolutely. I also believe that in Europe, of course, we have a much higher digital footprint, which is, you know, making the things also more complicated, but also increasing our risk more, whereas let's say in underdeveloped more, let's say less developed regions, and the digital footprint is much smaller, so people are more likely to give away the data that they have, because it's a lesser quantity. I think that I'm going to look at some questions from the audience again, just to make sure that we keep everybody happy. This is a question that I will point out, I think to Bronco into into you, do you think open banking and open finance for making common banks in the EU less relevant, actually, I believed in the top in the conversation we showed that they might become more relevant.

Branko Greganovic 52:08
Of course, but in general, incumbent banks are if if we equate the Kenyan banks with incumbent banking model, then by definition, open banking is one of the trends which make you know, incumbent banks business model and thinking more and more irrelevant, you know, so, incumbent bank has become a term which describes the current business model and that is definitely the open banking is definitely something which contributes to the current banking model becoming e relevant more and more, probably one of the main factors, actually, we are looking at now, which really make the income and banking business model irrelevant, already at the moment, we are a lot of times running something, which is a kind of zombie business model and are still working on being profitable, but without the proper future. If you do not, you know, move to the FinTech, open banking type of business model.

Jeroen de Bel 53:26
And I agree mostly with, with most of the things that Bronco sets, and basically, if threatens the position of incumbents, right? It's the market is changing, and this change is inevitable. You just need to follow suit and incumbents are less able to actually understand and make make the change. And what you see if they are not moving. It changes them more into product factories and more to the back ends. More utility providers and distribution goes into the hands of other parties potentially, I think there are ways for incumbents to address this. And they can take it actually as an opportunity if they take the right actions. But the risk is indeed if you don't do enough, if you sit on your back, and then you're losing your position and you become a low margin. Yeah, sort of dying business.

Frederic Lebeau 54:31
Is it maybe I can I can ask question on that one. Is it not the main risk is not related to not decide? Because I've seen some financial institution being a bit in the middle should I should I have to be more on the back or more on the front and then it's in the middle and no decision is talking? And then nothing at the end? Because I do believe that at some point in time being back and you know, it's good also be very good business model, but you have to assume and you have to create your, you know, your service according to that strategy.

Jeroen de Bel 55:08
So I fully agree with you in good point, right, it's as long as you make an active choice, you can also dedicate yourself into catering into all these other parties, sort of the basketball, as long as you make an active choice, if you are aware, and tailor yourself to if not do 10 things at the same time and everywhere losing hours, right.

Branko Greganovic 55:30
Which is why this is difficult for incumbent banks to move into that direction, subjectively difficult, you know, incentives work. Usually against that, you know, the ROI ease, you know, the processes are is in the process related to that work against that, it's really difficult, the fact that the boardrooms may lack, you know, general understanding of technology, and its implication for the business model, work against that it's not easy for incumbents, it's a big, it's a big, big challenge. And, you know, for the time being, you know, the incumbents, we still have the client base, and that's our biggest ally. You know, the business model is from the past, the clients are still in our room, but once the clients move, and now the incumbents will stay with, with, with the current business model if we do not move into the new business model.

Remco Veenenberg 56:29
So that actually gives you an from my perspective, a massive opportunity, then because if you have a government bank has a large client base is actually sitting on tons of data. So you could say, if monetized Well, a bank can actually thrive or an incumbent bank can actually strive in the world of open finance. Would you agree with Athena?

Inna Kostiuk 56:50
Yes, I definitely more than agree on it. And I also I kind of share, share Broncos feelings that it's hard because I also work for bigger organization, which is incumbent, but probably not as slow as the bank would be. And more ranted still. But it isn't as there are massive opportunities and just remind me my business case it solves education when we discuss okay, what is the way near banks of traditional banks? How to, because there are several cases when traditional bank tried to relaunch and the parallel neobanks Where did it go? Then there are cases when the traditional bank tried to buy kind of FinTech or near small now bank, how did they go? And then they, they just like big machines, it just took everything? How do you send? We are getting to the question back on the mindset, how to change it. And it's going to take some time, because as Bronco mentions, the clients are on their site, and the existing business model is still working. It's going to be either visionary, somebody comes in change, or it's going to be very be cured when the big tech started to get more and more clients through offering them business because they have more data, they integrate with payment, and bank bill. I can't say that become relevant, but they will lose more and more their added value proposition. And they started to have far more focus and partnership on this with big data in order to collaborate rather than visit clients. So that one was a potential fear I see.

Remco Veenenberg 58:45
Yeah, but I do see I do, I do still see a huge potential and the topic that was brought up called Trust, which is still something that I think is a huge, huge strength of the income bank in this. And especially if I look back on what very accident, all the business models and because we have only two minutes left, and we touched on so many topics today. So I would like to ask, each of you would like to give your last sort of key takeaway from today's panel discussion, because I've heard many interesting things from the 90 days consent to user consent management to API readiness to standardization across the EU to different business models to revenue streams and being thinking instead of building revenue, creating value for your clients. We've touched on so many things today, in a short amount of time. So guys, your last thought for today that is absolutely going to conclude this panel. I give you the floor Friday, what do you think?

Frederic Lebeau 59:42
So yeah, on my site, there was one thing I still have the feeling that we link open banking to retail, which is normal because today it's mainly retail. And all the time we talked about retail use case and we did not talk about you know private banking, investment banking so I'm a strong believer that in that area, there are a lot of use case about, you know, data sharing and opening data, which are nowadays not considered enough. So

Remco Veenenberg 1:00:12
that's your topic, perhaps your next panel discussion?

Frederic Lebeau 1:00:16
Yes. But that's an interesting one. Yeah.

Branko Greganovic 1:00:18
I agree. Actually, let me build on this trust issue. I think one of the main challenges of the incumbent banks is not to use trust of existing client base as the reason for not moving into the new world of fintech. That's because that's what the are usually tends to be doing. You know, that's, that's,

Remco Veenenberg 1:00:42
that's a very good point. Actually, I will, I will note that down, it's a follow up. What do you think you're gonna have today's discussion? What is your main takeaway?

Jeroen de Bel 1:00:51
If I like to get one, one statement, I think it takes time, but many things are happening under the hoods, it's moving into open finance. For industry, it's about aligning incentives, to enable everyone in industry to give the key tools or key ingredients to give great solutions to customers and for customers. Ultimately, it's about bringing them solutions that give them trustworthy, tangible benefits.

Remco Veenenberg 1:01:24
Yeah, thank you. That's a really good point. And ina will give you as the last one, but not the least.

Inna Kostiuk 1:01:30
Yes. For me, I think, in the end, the consumer will drive the biggest change, because they will take the trust or gives the trust. And then it's on their side home to this to try to ease and then as soon as any businesses because consumer centric, they could have a future. They could have trust, they could have different opportunities with open banking, with retail with other interest rate, etc. But so I think for business, it's important to be consumer centric.

Remco Veenenberg 1:02:08
Now, thank you very much. Dear panelists, I would like to thank you for your contribution today, we actually surprised at how many topics we managed to cover in a short amount of time, and even address the audience questions. So I'd really like to thank you for your participation towards the audience. Thanks for joining and listening in today. If you have any follow up questions towards the panelists, you can find the details on all of the LinkedIn posts of the evening sharing reason this, we will be continuing doing these kinds of panel discussions. So any feedback is more than welcome. Also topics that you would like to see in the future, too. So make sure that you give us or follow us on LinkedIn for more updates on these events, and connect with individual panelists and see what they are doing. So everyone, thank you very much. I conclude the panel. And I will write a blog follow up post with all of your key takeaways. So thank you very much. A absolute warmest regards from Amsterdam. Thank you.

Jeroen de Bel 1:03:07
It was a pleasure. Thank you again. Cool. Thanks. Thank you, everybody. Bye bye. Thanks. Bye

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