Open Finance - The Infrastructure & Players.

Welcome to our latest edition of "Connecting the Dots in Payments with Arthur Bedel," where we explore the dynamic world of financial transactions and innovations alongside this esteemed payments professional. Join us as we uncover insights and trends shaping the future of payments.

Open Finance is taking Financial Inclusion to the next level by bringing all financial data under one roof (or all roofs, your choice)??

The Definition:

?? Open Finance is the practice of sharing and accessing #financialdata across different financial institutions and service providers through secure APIs, with the explicit consent of consumers. It enables a more integrated, and personalized financial services ecosystem, enhancing consumer choice, transparency, and control over their financial data across geographies?

—> Financial Inclusion

The backbone of Open Finance is a sophisticated, scalable digital framework. Some key players have been playing a crucial role in this ecosystem:

?? Cloud Computing — Amazon Web Services (AWS), Microsoft Azure, Google Cloud?

?? Modern Core Banking: enabling real time transactions, digital account management & seamless integrations to 3rd parties — Temenos, Mambu, Brankas?

?? API Management: facilitating secure & seamless communication between diverse financial systems and services — MuleSoft, Brankas, Apigee?

The Ultimate Open Finance Stack (check diagram above) ???

??Intelligent Services — Subscription management, Chatbots, Beyond Banking Services

??Financial Products — APIs for Account Info, Payment Initiation, Card Issuing, Lending, Investments, Insurance...?

??Operational Capabilities — Identity verification, Fraud Detection, Risk & Compliance...

??Transaction Rails — API Gateway, Authentication & Authorization, Data Storage...?

Additional Infrastructure :?

??Back-Office Systems?

??Digital Ecosystems

Step-by-Step Approach to Open Finance:

1?? - Evaluate Regulatory Compliance

2?? - Assess Technological Infrastructure

3?? - Security & Data Protection Measures

4?? - API Strategy & Management

5?? - Partnership & Collab Frameworks

6?? - Data Governance & Analytics

7?? - CX Enhancement?

8?? - Risk Management & Compliance Frameworks

9?? - Staff Training & Skill Development

? - Continuous Monitoring & Improvement

The Players per Vertical (most are agnostic):

??Payments — kevin., Banked :, TrueLayer, Trustly, Vyne, Volt.io?

??Lending — Alloy, Belvo, YouLend?

??Savings — Flanks, MoneyHub?

??Identify — Credit Kudos, Plaid, Codat?

??Financial Wellbeing — Treasure Financial, Qwist

??Accounting — Mono, Fintecture?

Note — most Open Finance companies can play across all verticals!

?? Case Study - Starbucks ??

Starbucks embarked on a transformative journey in Southeast Asia to enhance its customer engagement and loyalty through innovative digital strategies.?

?? Its #mobileapp was designed with user-centric features, including digital wallet integration, allowing customers to link their preferred payment methods for quick and secure transactions and providing the coffee giant the opportunity to offer personalized promotions, track rewards and build loyalty.?

?? By adopting a data-driven approach leveraging Open Finance, Starbucks is sending targeted communications, encouraging users to engage more deeply with the brand by taking actions promoting financial wellness. The integration of AI, AR & VR will also enrich the CX making every interactions unique!?

Source: Brankas (The Ultimate Guide to building an Open Finance Tech Stack) & Royal Park Partners (Open Banking Report)

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?? Connecting the dots in payments... Marcel van Oost & Arthur Bedel.