Round Table: “Open Finance, towards an Open Ecosystem”

A few weeks ago the Leading Payments day took place: "Experience tomorrow's payments today", organized by Forbes and Minsait payments. Our CEO and co-founder, David Conde, participated in the round table on open finance together with Leonardo González, European Sales Director of Afterbanks and Iker de los Ríos, Chief Strategy Officer of Fintonic. Monica Valle was in charge of the presentation and moderation.

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Throughout the day the focus was fixed on the end users and the same happens during this talk. They chat about a model in which financial and non-financial entities compete to get the most out of transactional data, in order to offer users personalized and sophisticated products. They discussed the regulatory challenges to be overcome to consolidate open finance in Spain and also their impact on the customer experience.

The most powerful weapon in the financial industry to get to know the customer better

“Open Finance is a very open concept and, in fact, it can be applied to very different areas”, indicated Mónica to begin the round table. Leonardo then spoke about how large financial institutions are relying on this technology to complete their value proposition. “It can add knowledge in terms of financial scoring and payments, as well as being a substantial improvement in onboarding.” David used his turn to speak to remind all that Coinscrap Finance is an Afterbanks’ partner.

“Thanks to them we are able to add open banking to our financial innovation modules. These are based on the analysis, categorization and enrichment of banking transactional data through an AI engine developed by our own. COCO is capable of understanding that movement that you have in your bank account, classifying income and expenses and offering financial recommendations based on your needs and objectives. That is the key for adding value” .

David Conde

He also explained that, by using white-label modules, users can add all their accounts in one place with no interface changes. This allows them to see their overall situation in real time and improves the bank’s UX. Then Iker shared with the audience his company’s commitment to the economic well-being of the end customer: “Fintonic has been using open banking for more than 10 years so that people better understand their personal finances.”

Here’s a video with the complete round table!

The current situation of the industry regarding the regulation of open finance

“I think that we are still beginning to discover its potential, we are in an initial phase where we launch use cases to the market and little by little they are being adopted.” For our CEO, the key is being able to offer value to the user with hyper-personalized products and services in exchange for their transactional data. It’s a win-win deal for both parties. “It will be a game changer, capable of transforming the way we relate with the bank.”

Then Mónica asked Iker for his opinion on the massive application of open banking…

“As David said, we are just getting started. It sounds strange that in an event like this we continue to say the same thing, but the reality is that there is still a long way to go.”

Iker de los Ríos, Chief Strategy Officer of Fintonic

Iker highlighted the importance of launching really useful use cases for the user, which solve their pains. According to him, it is the only way to ensure that he is willing to connect all his accounts and it is possible to know all his banking transactions.

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Leonardo continued, recalling that the PSD2 regulation has managed to transmit security to users regarding the use of this technology. The fact that a multitude of large financial players are backing open banking will continue to promote its use. “There is a long way to go in the coming years,” he added, explaining that it will not only facilitate certain payment flows, but it will boost user satisfaction, reduce company costs, etc. Monica took the opportunity to consult what could be done to promote this use, including collaborations.

The foundations have been laid, but it is necessary to evangelize and cooperate within the sector

For Iker, the solution is to evangelize and, indeed, collaborate. Fintonic’s CSO defended that adoption depends, on the one hand, on the user’s understanding of the benefits. The applications of open banking to lending solutions, personal financial management or micro savings, show how banking customers take advantage of this technology. On the other hand, the collaboration,

“as David commented, in the end Coinscrap Finance helps other entities to offer solutions to their end users, and Fintonic, for its part, is specialized in credits”.

Iker de los Ríos, Chief Strategy Officer of Fintonic

“The information provided due to open finance is for us a layer of added value that allows us to better understand the customer,” he indicated. “Understanding the users’ ability to pay and their credit scoring makes it possible to offer loans in a simpler and more optimized way.” David doubted the power of evangelisation and positioned himself as a fan of behavioral economics because of its power to promote the use of these innovative tools and improve people’s financial health.

Improve your clients’ financial health by including a PFM in your product portfolio.

Use cases for the insurance sector that represent a disruption in a saturated market

David wanted to insist that, although the talk was focusing on the case of banks, it also applies to the world of insurance. He also explained how, thanks to open banking, an insurer can access the user’s transaction and check the expiration date of their policies and their amount. “It’s a brutal competitive advantage,” he insisted, “since it means launching communications at the right time and offering a hyper-personalized product to the customer.”

David jumped at the opportunity to highlight the importance of offering significant discounts as a “hook” to get the user to allow access to this transactional data. In the end, it is control that returns to the consumer, as they get a complete picture of their financial situation and take advantage of unique offers. “Speaking of data transparency, for many years Google has been using ours because, in the end, the benefit we get is worth it.”Then Mónica wanted to know the opinion of the Afterbanks representative:

“The customers need to know exactly what their benefit will be. Companies must be transparent.

David agreed and continued commenting on his hopes for the contributions to the business segment: “being able to have an aggregate photo of your cash position, what your next payments are, your collections or receiving financial recommendations is very important.”

Round Table: “Open Finance, towards an Open Ecosystem”

What is the secret of FinTech to add value to financial institutions?

“Little by little, a lot of use cases emerge that achieve natural evangelization”, indicated our CEO, who relies more on word of mouth than on evangelization induced by companies. When it comes to risk management or dynamic pricing based on financial habits, the opportunities are limitless and the three agreed that new use cases will soon emerge.

For this, collaboration between different players is essential and Leonardo insisted: “The FinTech world in particular, and the financial world in general, needs collaboration to move forward.” Specialization and collaboration are highly involved, as indicated by all participants. David pointed out: “In the end this is a speed race, the one who arrives first and offers the best quality, wins. That is why it is so important to look for partners that allow you to offer the service in a comprehensive way”.

Mónica intervened, because it was time to thank them for the interventions: Good things are ahead. Interesting things are coming and we will be there to see it and talk to you again”, she said. 

It has been a great pleasure to enjoy a chat with such great professionals and partners.
Thank you all!

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