A teaser from the upcoming FABRIC paper on Open Banking

1. Open Banking
Business Models
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2. Open Banking is a fast moving space. The interplay
between Banks, APIs, Regulators and FinTech has
resulted in a booming ecosystem that shows no sign
of slowing down.
Today, Open Banking covers a number of
key non mutually-exclusive FinTech
business models.
Traditional Banking
is evolving into
Open Banking
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3. Open Banking
Non banks access data from customers’ bank
accounts to provide insights or payments.
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While the scope and degree of Open Banking varies across the world,
banks are letting customers share transaction data such as spending
habits and payments with authorised third-party providers (TPPs), as
long as the customer has given permission.
Reflecting on the Open Banking traction in Europe and UK, we see a
clear trend where FinTechs (TPPs) focus on one particular financial
service, and chip away at incumbent banks’ market share. We see a lot
of traction in the areas of Payments, Wealth Management and Lending.
Manages the customer - The FinTech
Manages the most data - The Bank
Payments Wealth
Management
Lending &
Mortgage
Selection of European FinTechs - 2020
Valuation
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4. Platform Banking
Banks integrate with FinTech to offer better &
broader services to their bank customers.
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Platform Banking sees incumbent banks digitise and modernise
themselves to improve and retain the customer relationship, by
leveraging FinTechs (TPPs) to build a better bank.
In some cases banks forge strategic partnerships with select FinTechs
to create a marketplace, an ‘app store for banking’, where users can
enhance their experience with features such as PFM, Wealth
management and others.
Manages the customer - The Bank
Manages the most data - The Bank
Meniga helps users of the FAB mobile app to better
understand their transaction information. The platform also
enables in-app cross sell opportunities.
Surfly helps relationship managers (RMs) support customers
in completing complex application forms. The platform lets
RMs and customers work on forms together online.
Taiger helps teams to process physical & digital documents.
The platform uses AI to scan and understand structured and
unstructured documents reducing manual labour time
Fiskl provides a suite of SME services such as accounting,
invoicing, billing and reports. These services can be integrated
tightly with SME banking channels.
Not a typical FinTech, but the new UAE digital identity platform.
UAEpass unlocks full digital KYC and digital signatures.
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5. 3
Service Banking is where a bank integrates its services directly into the
products of other non-bank businesses. Meaning the non-banking
company can offer accounts, debit-cards, loans and payments as part
of their core offering, without the need for a bank license.
This is also known as White Label Banking, Banking as a Service and
Embedded Finance.
Manages the customer - The non-banking company
Manages the most data - The non-banking company
Uber has partnered with GoBank to provide
basic checking accounts and debit cards to
Uber Drivers in the US. We have seen a
similar move by Grab, the dominant hail riding
app in Southeast Asia.
Shopify has a lending platform that offers
funding to entrepreneurs and small businesses.
They take a percentage of sales to pay back
the loan. To date, Shopify Capital has lent out
$2 Billion in funding.
Service Banking
Banks enable other businesses to integrate banking
& payment services into their own products.
Chime is not a bank, but a tech company, with
white-label banking from Bancorp Bank and
payment processing by Galileo. Chime has a
laser focus on experience, resulting in over
12M customers as of February 2021.
Apple is not a bank. But they recently launched
the Apple Credit Card. The card is powered by
Goldman Sachs, and integrated beautifully into
the Apple Wallet and payment features.
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6. Open Finance
The sharing of all financial data, including
mortgages, savings, payroll, pensions and
insurance.
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Open Finance expands on the promise of Open Banking by sharing
even more customer data across the financial ecosystem. This richer
data-set stimulates innovation and more personalised financial
products and services.
Open Finance is still in its infancy. But regions that are more regulatory
driven with standards regarding APIs are better equipped to capitalise
on the potential of more open data.
Manages the customer - potential on both sides
Manages the most data - too early to tell
My Money Sense
The Singapore Financial Data Exchange (SGFinDex) is a public digital infrastructure that
consolidates financial information held across different government agencies and financial
institutions. Centralising all financial information gives consumers a holistic view of their
financial health, with better insights and recommendations.
MyMoneySense integrates with SGFinDex to provide Singaporeans with trusted, personalised
and actionable guidance for more effective and comprehensive financial planning.
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