Michael:
Hello everybody, my name is Michael Salmony. I’m part of the expert council of APC and very happy to have a talk today with Paul Brisk about Open Banking. Paul, maybe you’d like to introduce yourself.
Paul:
Thanks, Michael. Yes, I’m Paul Brisk, I’m currently in New Zealand, but I’m usually based in South East Asia. I’ve had some exposure to what’s happening with open banking in Asia, and today we’re going to talk about open banking and maybe contrast what’s happening in different parts of the world. So, maybe we should start by defining, what we mean by open banking, which could have a different meaning in different parts of the world, but Michael you’re based in Europe do you want to start with a definition of open banking.
Michael:
Okay, glad to start. Yes, I’ve been working a lot in Europe on open banking but also in a number of other geographies, right up to Japan. So, one does indeed see different interpretations of what everybody means by open banking, but for me it means allowing third parties (non-banks) access to data that the customer has at his bank. And so, by allowing others to access data that you have at a bank, you can do totally new business models. You can provide better service you get more competition, you get more innovation. So, this is probably the development when we look back in 10 years’ time where we will say this caused the bigest change payments and banking.
Paul:
Yes, and I would agree with that. The way I like to think about, or define open banking in particularly for people who aren’t familiar with it, is that, if I’m doing a transaction or I’m interacting with a digital distributor, maybe through a mobile phone app, I’m doing something that’s perhaps a little bit whiz-bang, a little bit innovative. If I have to cut out of that transaction to access my bank either to download account information or to request that my bank does a payment and to complete the transaction that I was doing with the digital distributor, then for me that’s inconvenient, there’s friction involved and therefore that’s not open banking. However, if I can stay within the environment of that digital distributor and ask my digital distributor to access my bank on my behalf with my consent to either access information stored at the bank or to perform a bank service, such as payment, while not having to access the bank’s environment, via the bank’s interface, but stay within that digital innovators environment, then that’s a much more convenient, frictionless experience and that is therefore open banking, that’s what open banking creates for the end user.
Michael:
Okay, I think we agree on that. I mean to put it simply maybe: if you just go to some new service provider and he – with your consent – looks across all your accounts and says “look you may be over insured here, under insured here, I may be able to get you a better loan deal here, you seem to be interested in ecology topics why don’t you invest in this” all by using data from your bank under your consents, that I think is the magic of this open banking.
I think what we wanted to talk about was to have a little bit of a debate – a Hard Talk as we like to call it – about regulatory versus market driven open banking. They seem to be two fundamentally different approaches which we see in the market. And we’ve decided to take sides: I will go for the regulatory side and you would go for the market side although I think we both see the advantages of both.
Maybe I’ll just quickly kick off, why I’ve chosen the regulatory side, because I think, unless the regulator steps in this is not going to be a pervasive effort, it’ll only just be a few big banks doing it and unless the regulator actually steps in and says I want the whole of Europe to do it or whole of a community to do it, this will not happen. So, although we’ve seen market driven developments in in America, and curiously Germany, for 20 years already, we are not getting full traction across all banks and that will be one argument I would like to bring. I have a few more, but I’ll let you speak now on this regulatory approach, which I think actually has a number of advantages. What would you say to that?
Paul:
Yes, so I think, the regulator-driven approach is probably where open banking first emerged. And I think it helps to understand, why the regulator-driven approach occurred and I would characterize markets, such as western Europe, the UK which probably were the first places where regulator-driven open banking started. Why did it start there? Because the regulators looked at those markets, saw that the banks had those markets sewn up and were blocking the entrance of innovators who needed to get access to banking data to allow banking services to provide fintech type services. So, the regulators stepped in and they did that very well or quite ingeniously. They said, actually the data that sits at the bank is a result of a customer doing a transaction, doesn’t belong to you the bank, it belongs to the customer. And the customer has the right to share that data with whoever, whichever third party they wish for the creation of a benefit. So, I would characterize that environment, that regular regulatory driven environment as the banks responding to regulation. They’re in react mode. And actually, I would say, and I said it’s still early days, but I would say that most banks are still resisting that. Market-driven markets and we’re seeing some of those markets.
Michael:
I will have to jump in, because you’re making quite a number of points here. Because I think I would disagree on a few a few points if I may,
One is, I think the initial thing was actually market driven, as I said: Germany has had open banking for 20 years, driven entirely by the banks as has the US. But it wasn’t pervasive. It didn’t make it across Europe for example and in US it didn’t make it across all banks and therefore people are leaning towards more regulatory driven approaches. And I totally agree with you, it is Europe that has been the first to actually enforce this in the whole world. So, this is a case where Europe is absolutely leading the world and a number of other geographies are looking at Europe to see what they can we learn from this experiment or this first mover on how they’re moving. But I think now that the regulatory impetus has been given, the banks were indeed initially reticent and said “Oh that’s another regulation and this is just going to cost us, we’re going to have to implement APIs and how do we make this secure, …”, but all studies now show that the banks have fully embraced this development. They see this as an opportunity of generating new revenues, of partnering with fintech’s, offloading some of the topics they don’t want to do with intelligent partners, offering new services, developing new business models. There is a lot of evidence and practice in the market showing that – despite the initial regulatory impetus or maybe because of it – that actually the banks are embracing open banking and that’s for the benefit of everybody.
Paul:
So, look at the other side of the coin for market driven. I’d say that where market-driven markets are different. So, you cite Germany as actually having tried market-driven open banking for maybe more than a decade, maybe a couple of decades. Why did it not gather in momentum? My feeling on that is again, because you’ve got markets where the banks actually had the market sewn up. They’re highly profitable and they serve most of the people in that market with bank services with bank payment instruments. No room for innovators to really crack into those markets. So, if I look at the other side of the coin, if I look at an India or an Indonesia or a China, the banks only serve the top of the value chain because falling below that level, serving people that are the lower part of the demographics, is unprofitable for the banks. So, that left a giant space open for fintech’s to come in and innovate without having to compete against the banks. They served those people and actually created digital commerce ecosystems where in effect they connected buyers within sellers, usually via mobile phone apps. So, created true digital commerce through to payment. Now initially, they concentrated on low-value sectors, but as they grew in critical mass, Indonesia is an example case in point, I guess would be Gojek, created a payment digital payment tool Go pay. They then created critical mass of customers moved up the value chain and started threatening the banks.
Michael:
I agree with you Paul on Indonesia – and that’s a market of course you know very well. But I think if one looks at the empirical evidence, one can see, if you just draw a map of the world to show where regulatory driven and where market-driven activities are happening, it is almost always regulatory, I’m afraid. And I would also disagree with a number of examples you’ve given, I’m afraid. For example, China and India. To me China is an incredibly state-driven economy by definition and India has the UPI which is also driven by the central bank of India which is effectively a state driven initiative. I think we are converging on the fact that we need both, right. You need the market driven to actually make things happen to get the innovation there but maybe you do need a regulatory impetus to cover the whole market to make it to actually get moving. You also need the regulator for other things around open banking like privacy and liability and things like that which the markets may not agree on across 4000 banks in Europe or across tens of thousands of banks across the world.
Paul:
Oh, Michael I would agree with you that even in a market like Indonesia, I mean just on China one point I would make is that, I don’t see China as an open banking environment. I think the banks have been locked out. So, they didn’t get the opportunity to do open banking. And India and Indonesia ended up having to join these digital commerce ecosystems, so not pressured by the regulators. Although I agree to a degree some of that’s happened in India but not at all in Indonesia. But where I will agree with you to finish up is that even in Indonesia, where at the moment there are no standards, there’s no regulation, the regulators are moving to put regulation in – not to drive open banking, but what we’re talking about here is sharing customers’ data and potentially requesting third parties to do payments on behalf of customers. We need to ensure the consumer or the customer is protected.
Michael:
Sure, because that’s also an interest that the state has. Well, I think that was a wonderful discussion thank you so much, it was really good. We agreed on a lot of things, we also found a few things to disagree about which I think makes it much more interesting for everybody. Really look forward to working with you at the APC and I hope the friends watching this video will enjoy it too, thank you very much.
Paul:
Thank you very much Michael.
Paul Brisk has over twenty-eight years’ experience working in consumer and retail payments. During this time, he has developed expertise on almost every aspect and component, both business and technical, of the end-to-end payment eco-system, from point of acceptance and the retailer, to acquirer, through to the issuer and consumer, and the role of the payment scheme. Paul’s focus has always been the impact and implementation of emerging technologies to the commerce ecosystem to create stakeholder benefit. For the last 12 months, Paul has been dedicated to building a start-up business in Indonesia that offers services and products to enable organisations to undergo digital transformation through the application of Open Data. Paul is currently Managing Director of the Jakarta based Pembayaran Digital Indonesia. The company is committed to delivering expert knowledge-based services to payment ecosystem stakeholders to aid in the transformation to digital commerce. Prior to Digital Payments Asia-Pacific, Paul established Cotignac Consultancy Services Limited in 2002 – an independent payment technology consulting and services company registered in New Zealand. Cotignac was successful in winning a large national contract with the Association of Banks in Malaysia to manage the market level migration from signature to PIN at POS. This resulted in Paul’s relocation from New Zealand to Kuala Lumpur from August 2014 to August 2017. He has remained based in South East Asia. Paul’s payments career started in 1992 with a decade at Visa International in both Asia Pacific and Europe. This included the opportunity to lead several large cutting-edge projects involving the implementation of chip based electronic purse, EMV chip-based credit and debit cards, multi-application chip cards and both issuer and acquirer infrastructure for secure Internet payments. Now based in Jakarta, Indonesia, Paul concentrates on applying his experience and knowledge to add value and assist the rapid and exciting transformation to digital commerce currently underway in South East Asian markets. His particular focus and passion are delivering services and products to enable the transformation of traditional business models to digital commerce through the application of Open Data.
Amb. Michael W. Michalak joined the US-ASEAN Business Council in September 2015 as Senior Vice President and Regional Managing Director. He oversees the Council’s six offices in the Association of Southeast Asian Nations (ASEAN) from the Council’s regional headquarters in Singapore, and leads the Council’s regional advocacy efforts and engages regularly with key ASEAN policymakers and thought leaders to offer his unique perspective on the k_ey role U.S. businesses can play in ASEAN. He also manages, coaches and develops the Council’s most critical resource: its staff.
Amb. Michalak most recently worked as an independent business consultant focused on Asia and particularly Vietnam. He also served as Senior Advisor to the private sector host committee of the U.S. APEC Year (2011). His diplomatic career with the U.S. State Department spanned more 30 years and included postings to Tokyo, Japan; Sydney, Australia; Islamabad, Pakistan; Beijing, China; as well as Washington, D.C. He served as U.S. Ambassador to Vietnam from August 2007 to February 2011. Prior to his position in Vietnam, Amb. Michalak was Ambassador and Senior U.S. Official to APEC. He also served as Deputy Chief of Mission of the U.S. Embassy in Tokyo. In addition, he received a group award for valor for his actions in time of crisis when the U.S. Embassy in Islamabad was burned down. Amb. Michalak began his career as a research physicist at NASA.
He holds a Bachelor of Science degree in Physics from Oakland University in Rochester, Michigan and a Master of Science degree in Applied Physics from Catholic University of America in Washington, D.C. He received a second Master’s degree in Public Administration from the John F. Kennedy School of Government at Harvard University in Cambridge, Massachusetts. He speaks Japanese and Chinese.
Milan Gauder is Executive Vice President of Product & Innovation Europe based in London. In this role, he is responsible for leading the product development for all Mastercard core and digital products and new payment flows, leading the change to a world where payment options are flourishing, while security, privacy and superb user experience are at paramount importance for the consumers. Previously he has led the Services verticals by overseeing the development and implementation of innovative new products in digital Authentication, Fraud prevention, Digital Identity, card benefits and reward systems.
Milan joined Mastercard in 2005 as an Account manager and has subsequently held a number of positions within the company. These include managing the Budapest office as Country Manager and both Budapest and Prague offices as Cluster Manager heading Emerging Payments for Europe. After this he moved to Dubai where he led product development, marketing and Advisory for the Middle East and Africa region.
Prior to joining Mastercard, Milan worked on consultancy projects in the banking sector, holding positions at Deloitte Consulting and McKinsey & Company.
As Chief Executive of Payments NZ and the Payments NZ API Centre™, Steve is responsible for ensuring the New Zealand payments industry remains innovative, progressive, interoperable and self-governing. He came to the role with extensive experience in senior executive roles through a career spanning more than three decades in industries as diverse as finance, energy, and consultancy services.
Prior to joining Payments NZ in January 2014, Steve served as General Manager Marketing, Sales and Customer Services with funds management company Gareth Morgan Investments. From GM and other leadership roles to founding and running a number of businesses, Steve is experienced in all aspects of business management, marketing and sales, and technology development and transfer. He has also had direct senior management experience in a leading payments business responsible for the processing of $3b worth of value per year. Steve holds a Bachelor of Commerce and Administration (BCA) from Victoria University of Wellington.
Vishal believes in challenging status quo and thinking creatively in problem solving. Currently, he is heading Data and Analytics Compliance Transformation at Citibank. Vishal advocates proactive, risk based forward compatible approach towards controls and compliance to harness the true potential of Artificial Intelligence and Data Analytics (AIDA) as one of the key business drivers. On daily basis, Vishal deals with subjects around eliminating data silos, accelerating AIDA adoption, improving data privacy, shaping internal policies and contributing to AIDA related regulations.
Kalliopi Spyridaki is Chief Privacy Strategist at SAS, the leader in data analytics. She joined SAS in 2007. In her role today, Kalliopi focuses on public policy and privacy compliance in Europe and Asia Pacific.
Kalliopi works with regulators and policymakers to help shape laws and government policies related to data and artificial intelligence that impact SAS and its customers. She also assists with SAS’s privacy compliance program aiming to ensure that SAS remains in the forefront of global privacy requirements.
She feels the most intriguing part of her work is striving to bridge the gaps between the making of a law, its implementation and the rapid pace of technology evolution with its transformative power for business and our society.
Kalliopi has lived in Brussels since 2002. Before joining SAS, Kalliopi worked as a legal adviser and public policy expert in various firms and organisations focusing on data protection law, competition law and consumer law. She holds a law degree from the University of Athens, Greece and a master’s degree from the University of Tübingen, Germany. She is a member of the Athens Bar Association. Kalliopi speaks four languages.
Dr Michael Salmony is Executive Adviser to the Board at equens Worldline SE, Europe’s leader in financial processing and transactional services, which processes over 17 trillion Euro per year. He is an internationally recognized leader on strategy of business innovations in digital and financial services.He is board-level adviser to major European banks, industry associations and European finance bodies.He regularly helps shape future directions in European decision making bodies e.g. European Commission, EPC, ERPB, and further national and international boards. His views are much in demand as keynote speaker at international events and he appears on TV/Radio/all electronic media on advances in finance and is quoted extensively (e.g. Financial Times, Harvard Business Manager, New Scientist, The Economist and by business schools and governments from Ghana to Malaysia). He has published much own original work which has been translated into many languages including German, Italian, Dutch, Finnish, Polish, Danish, Russian, Chinese and Japanese. Previous positions include Director Business Development of leading national central bank (Bank of the Year, Best Innovator Award). Before entering the world of finance,he was instrumental in setting up IBM’s European Network Centre for the convergence of IT, telecommunications and media and helped transform companies and business models in many industries (publishing, TV/radio, utilities, national rail, etc.) as IBM’s Director of Market Development Media and Communications Technologies. He studied at the University of Cambridge and is married with two millennial children
Davide Corda is a Senior Director within the Group Data Office of Intesa Sanpaolo with responsibility over the Group Data Transformation plan and platform. The Data Transformation Plan is an ongoing multiyear big data programme to integrate data supply chain for all core governance and regulatory processes and foster data exploitation using reporting, analytics and AI. Before joining Intesa Sanpaolo, Davide was Managing Director at Accenture Digital where he was Head of Applied Intelligence Delivery for UK & Ireland and European Lead Solution Architect for Analytics. During the course of 20+ years in the Data & Analytics sector across all industries, he has accumulated extensive experience of designing and implementing analytics solutions for large multi-national organisations, with a particular focus on data strategy, artificial intelligence, business intelligence, data warehousing, data governance, big data architectures & platforms.
Yeong Zee Kin is Assistant Chief Executive (Data Innovation and Protection Group) of the Infocomm Media Development Authority of Singapore (IMDA) and Deputy Commissioner of the Personal Data Protection Commission (PDPC)
In his capacity as Assistant Chief Executive (Data Innovation and Protection Group), Zee Kin oversees IMDA’s Artificial Intelligence and Data Industry development strategy. This is one of four frontier technology areas IMDA has identified for its transformational potential for a Digital Economy. The other three are cybersecurity, the Internet of Things, and immersive media. In his role as an AI and data analytics champion, Zee Kin’s work includes developing forward-thinking governance on AI and data, driving a pipeline of AI talent, promoting industry adoption of AI and data analytics, as well as building specific AI and data science capabilities in Singapore.
As the Deputy Commissioner of PDPC, Zee Kin oversees the administering and enforcement of the Personal Data Protection Act (2012). His key responsibilities include managing the formulation and implementation of policies relating to the protection of personal data, as well as the issuing of enforcement directions for organizational actions. He also spearheads the public and sector-specific educational and outreach activities, to raise both awareness and compliance in organizations and individuals in personal data protection.
David is the Senior Advisor for Data and Artificial Intelligence at UnionBank Philippines.
Concurrently David is an external advisor to Singapore’s Corrupt Investigation Practices Bureau (CPIB) in the capacity of Senior Advisor (Artificial Intelligence) and to Singapore’s Central Provident Fund Board (CPF) in the capacity of Senior Advisor (Data Science).
Prior to his current roles, David was Monetary Authority of Singapore (MAS) first appointed Chief Data Officer and Head of Data Analytics Group reporting to the agency Deputy Managing Director for Financial Supervision and subsequently Special Advisor (Artificial Intelligence) reporting to Deputy Managing Director for Markets and Development. In these roles he led the development of the AI strategy both for MAS and Singapore’s financial sector as well as driving efforts in promoting open cross-border data flows.
David has extensive exposure and experience in both industry and academia and he has consistently applied advanced technology with an analytical mindset to shape and deliver new innovation. David holds a PhD in Computer Science in the field of Machine Learning from the University of Southampton and graduated from Royal Holloway, University of London with First Class Honors B.Sc. in Computer Science and Artificial Intelligence. Out in the “field”, David is more likely to consider himself a data artist instead of a pure data scientist.
Piet has a degree in economics at the University of Amsterdam. After his study Piet joined the Dutch Central Bank, in which he held several senior management positions in economic research, economic and monetary policy and payments, lastly as a member of the Payments and Settlement Committee of the Eurosystem.
In 2004 Piet joined Currence, the then newly established Dutch entity for ownership of the Dutch collective payment schemes, including iDEAL. He became its CEO in 2006.
In 2011 Piet became CEO of the newly founded Dutch Payments Association whose members are payment banks and payments institutions in the Netherlands, combining the two CEO positions.
Piet chairs several steering and stakeholder groups on innovative payments in the Netherlands. For example the, recently finished, Instant Payments programme, iDEAL innovations (the largest online banking epayments system in Europe) and the national digital banking identification and authentication service (iDIN).
In his capacity as CEO he is also involved in other innovations in Dutch Payments landscape and participates in a lot of national and international meetings on payments
Wilko Bolt is a Senior Economist in the Economics and Research department at De Nederlandsche Bank in Amsterdam and Professor of Payment Systems at the Vrije Universiteit in Amsterdam. His current research focuses on the payment economics, digital currencies, two-sided markets theory and antitrust implications. He has published in journals such as American Economic Review, European Economic Review, Economic Theory, International Journal of Industrial Organization, and International Journal of Central Banking and Journal of Money, Credit and Banking. Bolt was awarded the Hennipman Prize by the Dutch Royal Economic Association in 2007 for his research.
Alex is the Regional Sector Head for Telecom, Media, and Technology clients at HSBC’s Global Liquidity and Cash Management department, based in Hong Kong. He has over 14 years of experience in transaction banking, global markets, and strategy roles. Alex joined HSBC in Hong Kong and has had over 10 years of transaction banking experience working with clients in the corporate segment covering consumer, retail, healthcare industries before transitioning to an internal strategy and business management role. His passionate interest in technology has led him to his latest role leading an experienced regional team across Asia Pacific.
Prior to joining Payments NZ in January 2014, Steve served as General Manager Marketing, Sales and Customer Services with funds management company Gareth Morgan Investments. From GM and other leadership roles to founding and running a number of businesses, Steve is experienced in all aspects of business management, marketing and sales, and technology development and transfer. He has also had direct senior management experience in a leading payments business responsible for the processing of $3b worth of value per year. Steve holds a Bachelor of Commerce and Administration (BCA) from Victoria University of Wellington.