Don’t let the word open banking intimidate you, because for the future of banking and finance, this is the way forward.
Open Banking and Open Finance are two models currently slowly taking over the financial industry, poised to revolutionize banking and financial services in unprecedented ways and act as “catalysts for a new wave of financial innovation”.
These were the main points of discussion during the 14th UnionBank virtual roundtable series E-TalkTales last June 28 via Zoom. The event was moderated by Erika Dizon, Head of United Bank’s FinTech Business Group, as the key speaker.
Dizon explained in her presentation that while Open Banking and Open Finance may be slightly different – the former facilitates data sharing for banking services, while the latter facilitates data and capability sharing across the financial sector – the goal is the same, which is to build open ecosystem.
An open ecosystem offers many benefits, including seamless data access and sharing, more opportunities for collaboration and collaboration, and most importantly, unprecedented customer focus, she said. All of this points to the movement’s potential to revolutionize the way people look at banking and finance.
Dizon cites some examples of how the Open Finance movement has had a positive impact on different sectors of society. For service providers, it can spark innovation and create new revenue streams. For businesses, it can improve transparency and operational efficiency. For customers, it can help enable better personalization and, in turn, a more meaningful experience.
Dizon also cited several pillars supporting Open Banking, namely (1) regulatory push for a framework built on the principles of consent, interoperability and collaboration; (2) expectations from redefining the digital and modern social experience of banking and finance Increase; (3) Competition, especially the emergence of non-traditional players; (4) Infrastructure, which increasingly relies on application programming interfaces.
“All of these factors were at play and sparked the start of the open banking and open finance movement and the unraveling of the traditional banking model,” Dizon said.
Following the presentation, Dizon participated in a fireside chat with event host and veteran journalist Rico Hizon. One of the questions she answered was data privacy, one of the biggest issues associated with open banking and open finance right now. She reiterated that at the heart of open banking should be customer consent, end users having the option to share their data or not, and to limit their data usage.
Another topic discussed in the chat was balancing competition and cooperation, especially since an open ecosystem needs the latter to truly serve its purpose. For UnionPay, rather than competition, it is more about “competition and cooperation”, she said, adding that players in different industries can benefit from a win-win model.
“We understand that some financial institutions, some fintechs, some third parties have specific products and services that we don’t have, and we believe that in order to serve our customers better, we should be able to integrate these specific products and services into our own,” Dizon said. Say.
“Open banking and open finance are only as good as the number of players working together in that ecosystem, and I think that’s one of the most important things we have to think about.”
On the topic of how open banking and open finance can create more value for UnionPay, she said that these enable UnionPay to identify new potential business models and thus generate more revenue streams and revenue models.
“More importantly, it adds value to our customers and how they conduct financial transactions, which is very important to us,” Dizon said. “Of course, as a bank, we need to think about a bottom line, but we believe there is room for both to coexist, both to serve customers appropriately and to enable banks to have new business models.”
