The Connector Podcast - Webinar on open banking - open finance - data collaboration

Welcome to The Connector Podcast, an ongoing conversation connecting fintechs, banks, and regulators worldwide.

Join CEO and founder Koen Vanderhoydonk as you learn more about the latest available trends and solutions in the markets.

Welcome everyone to our new podcast, and today we have a very special format, which is a webinar. It was our first webinar as The Connector And it will talk about open banking, open finance, and data collaboration and the future of all of that. So give me a warm welcome to our host of today, Remco.

Welcome to our panel on the main challenges of open banking, organized by The Connector and our partners Finco, NLB Bank, Worldline, and Data Village. I have a critical note to all the attendees. You will all be called Koen van der Hock. This is a technical issue, so from now on, if you don't mind, you'll be Koen van der Hock. You'll be a RackTech influencer, or if you want, you can change your name to whatever you prefer. I'm gonna go over the agenda shortly. I would like to introduce the speakers at 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 bring 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 Frédéric Lebeau, who is the co-founder of Data Village. So Frédéric, tell us, tell the audience something about yourself.

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 open banking a few years ago.

Thank you very much, Fredrik. Then I will give the word to Inna Kostiuk.

Hello everybody, I'm a Global Partner Manager at Worldline and an independent expert. I'm mainly working with merchants and partners, so I'm searching for new partners and growing business with the partners and to do our retail business even better and to have abundant payment there.

Thank you very much, Inta. Then I will give the word to you, Branko.

Hi, hi to everybody. I'm Branko and I'm running one of the banks of the NLB Group focused on the ex-Yugoslavia region. It's a typical incumbent bank with all of the challenges attached, including the challenge of open banking. So I really look forward to this discussing that today.

Thank you very much, Remco. I'm looking forward to your insights. And then last but not least, Jeroen de Bel, founder of Finco. Please introduce yourself.

Hi everyone, pleasure meeting you. Thank you for having, having me here, Remco. I'm the founder of Finco, a consultancy specialized in digital banking whereby we help our clients, being banks, to innovate and transform their organizations, whether it's optimizing existing organizations or building out completely new digital ventures. Among the topics we look at is open banking. As such, excited to join this discussion.

Yeah, thank you very much, Jeroen, and 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 a financial institution. And amongst The poll results we said we found that 10% said 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 35% has actually never heard about the DGA. So if the topic comes along in the panel discussion, I hope that the 35% gets to learn a bit more, and I hope that the 10% gets to understand that it 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 a statement, 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 Jeroen.

Sure, happy to share my thoughts. Interesting and broad 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 it up as well as also infrastructure investments happening, feeding into also embedded finance that we may touch upon later. So I think under the hood many things are happening and gradually users are, users are taking it up. When it comes to the challenges, 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 incentives for banks and others in the industry to actually share data. Nowadays, too much is still one party investing, making data available, others taking the benefit. So you want to look into making that more aligned. And lastly, I think it's also about the habits of people that need to— where it takes time to change. It takes time for people to see the benefits, to adjust their their way of doing things and also tapping into open banking solutions in that end.

From my point of view, looking for a bit from the merchant perspective as well and from the business itself perspective, we also see that the market doesn't have kind of the same level of technical performance as you mentioned, Jeroen. We have different limited availability of API and even if Everybody stated that they have an API, but they're not really comprehensive. And sometimes bank incumbents especially are more reluctant. So there is really delay on timing. And also the fragmented regulations, because each— regardless that EU has global regulated policies, but each European country has their specifics. And sometimes to have it across Europe is not always easy. And I believe, Branko, you really more than agree on it, and you have probably more to add into it.

Yeah, I think we should be careful not to reduce open banking to PSD2. I think that's a much wider concept, in a sense also, in that sense also much more important concept of, you know, how does banking look like in an API universe, if you want, in a universe in which banks and the whole economy is connected through APIs. And this is something which we may want to mention that the growth of open banking and the whole open economy is constrained by the lack of standardization of APIs. 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.

Yeah, and on my side, I really like the 2 things you mentioned, Jeroen, about the business model and the lack of business model. And I do believe it's also combined with the friction in the user journey, especially in regards to that consent. I've seen a lot of initiatives stopped because, you know, the business model is not strong enough compared to the friction in the journey for consumers, especially regarding that duration of the consent. So that's for me clearly one of the reasons why open banking is not as successful as expected today.

I think we've already touched upon many different points here. I mean, the 90 days consent time is actually limiting this very severely, in my opinion. Also, what Jeroen pointed out about the business models, which are not really that viable, and also the incentivization, We also touched about that, and we also already touched upon APIs. So we have lots and lots of content to go on to, which actually moves us to the right question, I think, to be asked next, especially when we talk about business models and incentives. And that is, is Europe ready for open finance and 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 offer highly personalized banking experiences, and 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, Branko? Is Europe ready for an open data economy?

I think that put it into the time perspective, it is ready. You know, of course, the problem is what is the timeframe that we talk about? These changes tend to have the exponential growth patterns. So, you know, until— I think there is a book which is saying, you know, until it moves to the other part of the checkboard, you know, chessboard. it looks like it's moving nowhere, but there is an inflection point where it explodes. And then if you're not ready for that inflection point, you are basically led and you can be out of the market very quickly. So I think that definitely 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 are more a sign of the exponential nature of the exponential growth than anything else. So we, especially we incumbents, 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 the future business model, and once the learning curve jumps, it's going to be too late to react.

Yeah, I agree with Bronco. It is happening. It is the future. Is Europe 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 acting in this industry. You want to continue working on this, make yourself ready, and one step at a time build towards this open finance or this open data economy.

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 2 years. So definitely Europe is trying to be ready. So Europe is really putting everything in place to be, let's say, the place where open data economy will happen. So typically we mentioned at the starting point the Data Governance Act, so really enabling data sharing. And it's not only in finance, it's beyond finance. And there are now a lot of initiatives in Europe, in retail, in media, and in a lot of industries that are also looking about open data economy. 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. The point is that it's really horizontal. It's not Vertical only on finance. It's really a horizontal approach at the European level.

And for me, if we are talking about the business model of open data economy, it's actually quite conceptual change of business model because there would be different players first for collecting data. So it's not just like banks, financial institutions, it would be governments as well. Government institution, the one who— others who are giving the consent to collect, to be allowed to process their data, so it's users like us. Then it would be some value-added services, startups, whatever organization who are working with that and created the service and the business. And between all parties, one of the biggest challenge or the barrier I see is trust because all of them, governments, can't really put all data out by just if it's decided as one country. So it's going to be global move or not. Users, especially who are a bit more educated, they are really more and more concerned about their data. And then we are getting into the position that the business model fully cannot function. And we have a bit of jumps on all sides. And in the end, like new startups, like which are using the approach of OpenAI or open data source, they kind of function somewhere, they succeed, but it's not like really full aspect. I think it's really going— in order to that open data economy start to function, it will take some time because the adoption and mindset and the trust and benefits which any consumer could get. It will take time when we'll see. So at least that's for me. So I would be very concerned if my government would give data to everyone, even to make it better for me. So then it would get a lot of questions for fraud prevention, for anti-use, anti-abuse of my data, etc. So there are probably much more questions behind than just to— are we ready to have this all open data economy? How we can benefit from it?

Yeah, I think, I think that's a very good point. I think that we've— we're 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, Frederik, and, and then I would like to move on to Branko. The question from the audience is 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.

That's a very good question because there are 2 points in 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 the right way, meaning according to the regulations. And that's typically the 2 main points when we talk with institutions, financial institutions, but also in other industries. These are the main 2 reasons why organizations are not willing to share data today. It's mainly for the 2 reasons. And to answer that question, so there are obviously different angles to address that. The first one is about moving from data sharing to data collaboration. I know this is a topic that comes later in the discussion, but I think it's 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 as 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 run algorithms on this data, but in a controlled way. So here it's more about making sure that the data will not be leaked across different organizations. 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 leveraging 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, Ina, you mentioned consumer control and more control about the consumer. There are now technology also supporting that, and typically here in Belgium, you have the Flemish government who is betting a lot on the on the technology called Solids, which is a consent-based technology. 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, a privacy center where users 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.

If I may, Remco, the personal data challenge is definitely, you know, one of the main bottlenecks of the development, and that definitely has to be solved, not only the management of it, but also the ownership of it. We will see what, you know, in what direction is that going to develop, including the possibility of monetization and what have you, you know, in that domain. I think that technology here will definitely help and some point, we will find a way to balance the user experience, the convenience, the seamlessness of a service with the rightful 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 a enormous wealth of other data which, if accessible in a way which is facilitated by this API integration universe, can be used to really improve not only financial services but, you know, any service and any product we have around. So generally sharing data, opening up data, is really an important concept which we should promote and use to improve our services, you know, until this private data, personal data challenge is solved in this or other way. But we do have a lot to do in the meantime and 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.

Yeah. Ina, do you have some use cases where you see benefit, let's say, from using other sources of data than just, let's say, personal data or transactional data? Do you already see that happening at Worldline, for example?

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, Cordline, inside credit scoring. So that's really focused for banks to improve this facility to get credit. And also from the retail perspective, they kind of want to reply to the demand of consumer to have buy now pay later options, but they put themselves at risk because sometimes they might never receive 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 or pre-scoring already built in or integrated with that payment method in order to have pre-authorization from processing companies that they will have money. So everything has to happen very prompt. So, you know, if you buy, I don't know, new headphones for 3 months in payment, you want them now, but you don't need to collect a lot of documents and to bring it to online shop. So you just choose option buy now, pay later. But the merchant, the online shop, wants to be sure that you're 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 in this sense, we use the open data. We also use our internal scoring We have different type of product features for such type of demand, of course.

Yeah. And then, Jeroen, how do you see some of the, let's say, 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?

Yeah, difficult and good question. a bit broad, but if you look at the long term, it's all about everything flowing seamlessly, all interconnected. That is 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 and now, I see it more indeed in context of your credit scoring, that companies use open banking to allow clients to seamlessly feed in their data into the systems as opposed to manually uploading documents. Another area that's very big obviously is AML for other reasons, but there also you see more and more parties shifting away from sort of the traditional rule-based approach only to also more and more Looking to alternative ways to to to identify the risks in the Netherlands. Also, a recent case between Bunk and the Dutch Central Bank was about that. I think still still still a long way, a long way to go in that area to also get the full potential. It takes some time and steps. But you see across these areas all sorts of examples and. Organisations trying it out. I haven't seen it materialise yet or maturing in a way where we feel, okay, it's all ready, but they are working on it.

Yeah, yeah, yeah, yeah, yeah, clear, clear. Then I think we can move on to the, to the next question. And I think we've already— and I actually kind of want to sum them up because I've already heard like many interesting touchpoints. 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 challenges that 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, do we need a standardized regulation across the EU that could remove these kinds of barriers and actually give users full complete control over their consent management, which would actually probably solve this issue. And we have already had it over technical implementation problems. We had it 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 come back to the business model and incentives. I also saw in the left corner of my eye someone commenting on people's risk perception. And it's sort of this whole holy grail for customers, it's about the benefits versus the potential cost, potential risk, and as well sort of speed of using 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, it 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 as such. And that allows to get all sorts of data models around it.

If I can react upon that, that's clearly a limitation of open banking. I mean, banks 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 that's one of the things— it's not fully correct, but at the end, 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 financial institutions. 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 per case data or these kind of things could make a lot of sense. So bidirectional is important, and from my point of view, I do really believe that regulation, vertical regulation, is not the only the single answer to to open banking. Opening to other industry through horizontal regulation. Coming back again, sorry, but. 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 this bidirectional 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.

For me, if I can add, for incentives for banks, From one hand, indeed, it looks like that incubant been just obliged to share their data, and it might hurt, and especially like feel that they're just coming and taking. But on the other hand, I believe there is there are a lot of opportunities for them to start collaborate with the third party, and it which actually helps them to be innovative. I know that in banks. In reality, to have some changes, it takes a lot of time because Worldline also is a big ship and changes take time. But to have this access to third 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 highlights the area where probably better to tackle in for banks and where to go for revenue increase. So in long term, I see there are quite a lot of opportunities, although on the short term and currently on the moment of change, it doesn't seem to be so easy.

Yeah, and that's exactly a question that I just got from the audience as well. And I think you already elaborated a little bit on that, Ina. I will ask that to you, Frederik, and then I will ask that to you, Branko. Can you give me any examples on how banks can monetize from open banking, some real-life use cases that are actually increasing revenue for them?

It's a good question. So I know one quite well. So it's a use case mixing retail data and bank data. Data. So it's a bidirectional use case where the financial institution can monetize data by combining with your purchase data and bringing customized cashback, automated cashback to consumers. Also going beyond cashback, it's all about predictive purchase 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. For me, that's the best example I have today, which is a real and 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. There is something in return as well, so it's about combining.

Yeah, and Branko, can you give some examples?

Yes, the open banking lets the bank really increase the quality of their services. For example, we of course are also, as banks, mainly focused on non-clients using the access to the bank. But on the other hand, the APIs and open banking concept gives a bank to improve their integration with existing client base. And now with the client base where there is no such big issue, or it's already regulated issue of consent. So the integration of the bank with existing client base and improving the services based on open banking technology, including moving into embedded financial services, integrating yourself into your client's business, letting your clients basically do self-service banking, and improving overall user interface and speed. seamlessness of the service is something which cannot be achieved by non-open banking technologies, or with open banking technologies, you can do, you can produce services which are incomparably more valuable for the clients than with the traditional technologies. So it's a completely different room. It's a new room. It's a completely different business model. And with it, of course, there are also new revenue models which are made possible with the open banking, open finance technology. So there's a lot of monetization possibilities not related again to a particular product, but 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.

Perhaps, Jeroen, you can elaborate on that, given your experience that you've built many digital greenfield 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?

Yeah, a lot has been said already. And I think there's sort of 2 main categories. One is about value adds, and that 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 standard solutions like managing your expenses, subscriptions, and then referring to an alternative provider and get a distribution fee there. So I think that is generating revenue, albeit again also with mixed uptake. When it comes to another area, I think we haven't touched upon this. Yeah, if we change the perspective from revenue to more like value generation, I remember the early days of OpenBig in the UK, there were many alternative providers out there, payday lenders and such. One party that comes to my mind right away is what's called SafetyNet Lending. And what we're doing was a money management app and tracking finances across accounts. And their service was basically, if you go in overdraft, they will lend you the money so that they themselves can issue more loans and you as a customer avoid all these hefty overdraft fees in the UK market. And alternatively, also they managed and they nudged customers to automatically repay once they had funds on the other accounts. So also they actively managed the, 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, it could be a more pressing issue. And also there you can make the customer better off as well as the bank avoid any losses from loans.

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

Absolutely. And now we're talking about self-service banking, which can definitely be facilitated through open banking technology, including 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 and integrating yourself with your clients' business processes, i.e., the embedded finance. So embedded finance plus self-service banking already for existing client base, you know, I think offers enormous business potential for incumbents already if they of course change the mindset, which always is easier said than done.

That's a good point. Would you like to comment on that, Ina? How do we change the mindset?

Easy one, right? Well, to change mindset will take time and probably not very short. But when I'm reflecting on banking, we do have quite actively growing neobanks. And we see that who the neobanks who just claim to be fully digital now sometimes thinking to open maybe branches, maybe there or there, because for them as well they see that importance to be in touch with their clients, to serve the clients. Sometimes you just have to meet them. And yes, it might be different versus commercial client or just physical client or company with whom you embed your payment or your finance, it can be different completely, but they're still thinking about it. So for me, it's like in retail. You cannot say because of COVID now everybody's 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 self-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, some relationship 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 going to 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 it's pretty hard. So for I think back to question how to change mindset, I think go slowly step by step, but creation of the trust is a key.

Maybe let me just jump in to say. Change of mindset has 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 mind change because they cannot imagine what needs to be done. If you cannot imagine, you cannot realize.

I would like to bring another perspective to the table. I think 2 valid points It's about the customer and omnichannel experiences Ina 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 get an overview of her finances. She's more active with those digital solutions than myself, and actively we are, oh, this week I spent too much on my groceries or such, and checking into that. Or she's using this this other solution to change utility providers because well with gas prices that's now very important. So with two clicks she changes that, and because it's a simple for her to use and b 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. Specific benefits for, for users. So it generates the uptake.

Yeah, yeah, I think that customers will only be okay with their 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, Jeroen, which you highlighted here. I only managed to convince my mom to start using Revolut when she found out that in the United States you cannot actually pay anywhere because a Dutch bank card is a debit card and it's using a Maestro card scheme. So yeah, then you're pretty much screwed if you want to take out some cash. I think that 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 business conducted, basically. So, and that also goes back to some of the earlier points that we've touched, right? That is the user consent overcoming this. And I think that's one of my key takeaways so far right now is really the big challenge is 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 value is being created, and the mindset at the bank obviously has to change as well. But I think that will go step by step. Then I have— there's still many questions that I would like to ask the panel. Is anyone that wants to put in anything related to the last points that I mentioned?

Oh yeah, about the consent. That's clearly something Allez, I mean that's everywhere. I mean, everyone knows the cookie consent. It's a nightmare as well. So consent 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 the most important. I do believe the most important is to make it really frictionless. So giving a way to consumers to engage without any friction, but at any time giving them a way to know what's happening with their data. So 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 or to get trust from consumers. So consent is a difficult one. It's really a difficult one to make it user-friendly, I would say.

Maybe we should also mention that But, 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 actually expected and asked many times also to protect our clients and be active in that. So I see that going hand in hand and showing that You know, 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.

Yeah, yeah, yeah, yeah. But I think touching upon Fredrik's point as well, I think we can solve a lot if the user has complete visibility 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 Jeroen just said was, was very, um, you know, easy but very easy to understand use cases also for different, uh, let's say, uh, segments. Yeah, 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 is 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. Or 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 consent can be convinced. And I definitely think that also— and perhaps, Inge, you can elaborate a little bit— do you believe that And it's been proven that also across different geographies, a study in Asia was conducted that pretty much 80% is willing to share data in order for better experiences. What 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 consent regarding their data?

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 in a nutshell, look in Africa, there is the biggest number of unbanked population in Africa. Of course, when you talk to that people, or to that area about consent, it's not relevant for them, right? But on the other hand, in Africa, we could see one of the best cases, M-Pesa, in the world, the fastest adoption transaction of the money via telecom operators. We don't see it anywhere else just like this. They just leapfrog everyone on that just because it was a super right time and product-market fit. On that, look in Latin how Latin America is growing now as well. They have quite a big population underbanked, and they're also quite concerned about the cost of transaction. So all type of fintech neobanks are growing there with minimum digital knowledge and digital inclusion. People are really happy to at the to adopt all possible solutions. And for that, they're ready to give all possible consent for them. If you look on Europe and America, so the market's the most developed, so we're the most mature markets. We have our comfort with credit card, we have our comfort with traditional bank, we have our comfort with the way we are doing our finance, we are living our life. Why do we really need to give consent? What is the benefits? So people asking completely different questions and they had before they're getting that step. And I think somebody was mentioned like the people would be ready to share data if they see the value, of course. But in Europe, it's much harder to bring them this value because the financial level of markets and adoption and service is 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 gonna be easy, or we cannot say that for everybody in the world it's gonna be the same approach. It's gonna be different based on, based on realities. And of course, different generations have different, different way of doing their finance.

Yeah, I don't know. Absolutely. I also believe that in Europe, of course, we have a much higher digital footprint, which is, you know, making things also more complicated, but also increasing our risk more. Whereas, let's say, in underdeveloped, more, let's say, less developed regions, 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 Branko and to Jeroen. Do you think open banking and open finance will make incumbent banks in the EU less relevant? Actually, I believed in the top, in the conversation we showed that they might become more relevant.

It depends, of course, but in general, Incumbent banks are— if we equate the incumbent banks with the incumbent banking model, then by definition, open banking is one of the trends which make incumbent banks' business model and thinking more and more irrelevant. So, incumbent bank has become a term which describes the current business model. And that is definitely— open banking is definitely something which contributes to the current banking model becoming irrelevant more and more. Probably one of the main factors, actually, we are looking at now, which really make the incumbent banking business model are irrelevant already at the moment. You know, we are a lot of times running something which is a kind of a zombie business model, you know, still walking, even being profitable, but without a proper future if you do not, you know, move to the fintech open banking type of business model.

Yeah, I agree mostly with most of things that Branko said. And basically it threatens the position of incumbents, right? As 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 the change. And what you see if they are not moving, it changes them more into product factories and more to the back end. 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, your back, Yeah, then you're losing your position and you'll become a low margin, yeah, sort of dying business.

Is it— maybe I can ask a 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 have to be more on the back or more on the front and then it's in the middle and No decision.

Stuck in it, yeah.

And then nothing at the end. Because I do believe that at some point in time, being back and, you know, it could also be a very good business model, but you have to assume and you have to create your, you know, your service according to that strategy.

So I fully agree with you and 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 BaaS model, as long as you make an active choice, if you are aware and tailor yourself to it and not do 10 things at the same time and everywhere losing out, right?

Yeah.

Which is— but it is difficult for incumbent banks really to move into that direction. Subjectively difficult, you know, incentives work usually against that, you know, the ROEs, you know, and the processes, ROIs and 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, 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, you know, the incumbents will stay with the current business model if we do not move into the new business model.

So that actually gives you, from my perspective, a massive opportunity then, because if you have a— the incumbent bank has a large client base, it's actually sitting on tons of data. So you could say, if monetized well, a bank can actually strive, or an incumbent bank can actually strive in the world of open finance. Would you agree with that, Ina?

Yes, I definitely more than agree on it. And I also, I kind of share Branko's feeling that it's hard because I also work for a bigger organization which is incumbent, but probably not as Slow as the bank could be, and more tech tech-oriented still. But there is there are massive opportunities, and I just remind me my business case at Solve Education when we discuss okay what is the way neo banks or traditional banks how to move because there are several cases when traditional banks tried to Relaunch on a parallel neo bank. Where did it go? Then there are cases when the traditional bank tried to buy kind of fintech or small neo bank. How did it go? And then they they just like a big machine. They just took everything how it is, and we are getting to the question back on the mindset how to change it. And it's gonna take some time because, as Branko mentioned, the clients are on their side. And the existing business model are still working. It's going to be either visionary, somebody comes and change, or it's going to be very big hurt when there are big tech started to get more and more clients through offering them business because they have more data, they integrate with payment, and bank will— I can't say that become irrelevant, but they will lose more and more their added value proposition, and they started to have more focus and partnership on this with big tech in order to collaborate rather than with the clients. So that's one of the potential fears I see.

Yeah, but I do see— I do still see a huge potential in the topic that was brought up called trust, which is still something that I think is a huge huge strength of the incumbent bank in this. And especially if I look back on what Frederik said and all the business models. And because we have only 2 minutes left and we touched on so many topics today, so I would like to ask if each of you would, 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 you know, standardization across the EU to different business models, to revenue streams, to being thinking instead of building revenue, creating value for your clients. We've touched upon 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. Frédéric, what do you think?

So yeah, on my side, there is 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 cases about, you know, data sharing and opening data, which are nowadays not considered enough.

So yeah. That's a topic perhaps for our next panel discussion.

Yes, but that's an interesting I agree.

Branko?

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. Because that's what we are usually— we tend to be doing, you know, that's the problem.

That's a very good point, actually. I will note that down. That's a Good for follow-up. What do you think, Jeroen, of today's discussion? What is your main takeaway?

If I like to give one statement, I think it takes time, but many things are happening under the hood. It's moving into open finance. For industry, it's about aligning incentives to enable everyone in the 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.

Yeah, thank you. That's a really good point. And Ina, I will give you the last one, but not the least.

Yes, for me, I think in the end the consumer will drive the biggest change because they will take the trust or give the trust, and then it's on their side who to To share it with. And then as soon as any business is consumer-centric, they could have a future. They could have trust, they could have different opportunities with open banking, with retail, with other industries, etc. But so I think for business it's important to be consumer-centric.

Yeah, thank you very much, dear panelists. I would like to thank you for your contribution today.

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