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AA Masterclass: Neobanking, Open Banking and Opportunities in the Account Aggregator Framework

27 Jul 2020

This video contains a presentation by Ramganesh IyerBharat Kumar Ramesh, and Angad Kapur, all executives from Bain & Company (a management consultancy headquartered in Boston).

In this masterclass, the executives took turns to provide Bain’s perspective on open banking evolution. This session covers

Disaggregation of Traditional Banking Business

  1. The disaggregation of the traditional banking system by various players includes the digital infrastructure (Amazon and Google), banking infrastructure (MasterCard, WorldPay, ClearBank), banking experience (Venmo, Digibank), and ecosystem (Apple, Google, Mint, Open, and Tink). (3:24m)
  2. Interaction between various ecosystem participants, such as regulators, technology companies, and consumers, drives their needs. (8:27m)
  3. Evolution of the banking system in the next 3-5 years and discusses the three scenarios most likely. (9:46m)
  4. Six unique challenges that incumbent banking companies will face and how they are likely to manage them. (11:40m)

Evolution of Open Banking Globally

  1. Comparison between open banking and BaaS (Banking as a service) of providing core bank end services and front services to consumers (13:45m)
  2. Different types of open banking players operate between banks and acquirers to open services such as bank accounts (Synapse and Cambr), issuing cards (Stripe, Marqeta, and Synapse), and lenders (Kabbage, Ondeck, and Synapse). (16:45m)
  3. Evolution of open API providers such as Plaid and, Tink. How traditional banking players (ABN Amro) and customer acquirers (Kabbage, Zero, Empower) use them to provide innovative technology and services.
  4. Different types of use cases for open banking APIs include credit scoring, investment advisory, personal finance, payment authentication, and employee/customer onboarding. (20:18m)
  5. Different ecosystem players (such as SoFi, ABN Amro, WealthFront, Venmo, PayPal, and Avenzee) leverage these APIs and provide innovative financial services to their customers.
  6. The five archetypes of open banking API players that crowd the global landscape (26:23m)
  7. International case studies on how ABN Amro (with Tink), Venmo (with Plaid), FreddicMac (with FinCity), and HSBC Marketplace (with bud) leveraged open banking APIs players (29:32m)

Evolution of Open Banking Regulations

  1. The regulators address four aspects of open banking: managing ecosystem participants, managing security (such as customer identification, consent, and data security), defining standards data sharing, and defining payment initiation and transaction standards. (32.15m)
  2. Comparison of different countries with India on their evolution of regulations. (35:05m)

Companies Referred in Masterclass

The following companies are mentioned in the masterclass with the link to their websites.

  1. Digital Infrastructure or Cloud Providers: Google, Microsoft, Amazon web services
  2. Banking Infrastructure: MasterCard, BharatPe, PhonePe, WorldPay, ClearBank, Deutsche Bank
  3. Banking Aggregators: Open, Royal Bank of Scotland
  4. Lenders: Kabbage, OnDeck, Synapse
  5. Card Issuers: Stripe, Zeta, Marqeta
  6. Bank Account Aggregators: Cambr, Synapse
  7. 3rd Party Aggregators: Tink, Mint, Canopy, eWise, Bankin
  8. Digital Banks: Venmo, KredX, Swish, Digibank, Simple, Monzo
  9. Ecosystem Players: Facebook, Amazon, Google, Alibaba, WeChat, PayTM

Open Banking API Players

  1. Financial Institution Focused: Tink, Bud, MX, SaltEdge, nDgit
  2. Fintech Focussed: Plaid, Productfy, Instantor, Figo, Yapily, Belvo, Finbit.io
  3. Financial Institution and Fintech Focussed: Finicity, Flinks, Neonamics, Unnax, Basiq
  4. Loyalty Program Focussed: Empyr
  5. Non-Core Data Aggregation Focussed: Perfios, Synapse, Galileo, Token