AIBP Insights is a series of closed-door regional roundtable discussions which are part of our ongoing engagement with enterprises in ASEAN to look at topics affecting digital transformation for their businesses. The purpose is to enable the exchange of ideas between industry stakeholders and spearhead creative collaboration across industries and countries.
In the past few weeks, we hosted a series of discussions ranging from Customer Experience in the Retail sector, Resilient Supply Chains, Industry 4.0 in Traditional Manufacturing, and Smart Cities. You may also be interested in our discussion on Elevating Customer Experience in the FSI industry with regional fintech and insurtech companies, and Digital Technologies among banking and insurance companies.
In our final session for BFSI, our panelists from Bank Syariah Indonesia, Rizal Commercial Banking Corporation (RCBC), Standard Chartered Bank, Talend, UnionBank and VPBank came together to discuss and share their expertise and insights on open banking and financial inclusion.
Nitin Bhandari, Managing Director, Global Head - Banking APIs and Open Ecosystem, Standard Chartered Bank, kicked off the discussion with a presentation on the ‘Why, What and How of Open Banking’. He observed that changing consumer behaviour has led to a fundamental shift in expectations in the past few years. Coupled with social media, consumers are expecting a frictionless experience, where businesses are expected to present instant service. Open banking comes into play when businesses build a seamless experience with zero-touch, scalable, and collaborative service.
Giang Pham, Director of Partnership & Digital Ecosystem Development Center, VPBank, agreed with Nitin and shared an example where bank applications now are used as a centralised platform to carry out multiple tasks such as paying bills. He added that VPBank prioritises the user experience by analysing the UX and UI metrics, thereby building a seamless customer experience.
David Hardoon, Senior Advisor, Data and AI, UnionBank, agreed that open banking will help to improve customer experience. For instance, through open banking, customers will be able to have an overview of all their bank accounts through a single page, where partners and vendors build a conjoined service for customers.
Data Consent & Governance
Lito Villanueva, EVP, Chief Innovation & Inclusion Officer, Rizal Commercial Banking Corporation (RCBC), strongly believes that having consent is the most important, and customers should be able to decide whether or not their data is shared. It is imperative for banks to prioritise customers and to be transparent about the purpose of the data usage. Agusta Rinaldi, SVP – Project Leader Wholesale & Transaction Banking Roll Out, Bank Syariah Indonesia (BSI), agreed with this and added that they strive for truth and commit to validation best practices, which will contribute towards a safe and secure environment for open banking. For instance, whilst eKYC is a relatively straightforward process, Giang shared that VPBank is very strict when it comes to consumers’ consent.
Yoga Pramudya, Country Sales Director, Talend, acknowledged the challenges when it comes to data governance and shared that from a security perspective, enabling two-factor authentication can be a starting point for BFSI companies to avoid encounters with fraudulent parties.
David believes that the vast majority of the population do not read T&Cs or legal disclaimers and simply want to proceed. Because of the fiduciary responsibility mandated by regulators, insurance agents, for instance, are obligated to check with customers and get verbal consent that they understand the T&Cs.
Pak Agusta shared that BSI introduced the Sekolah Pintar (Smart School) Platform through partnerships with multiple schools which enable them to reach out to a wider population. This platform was initially introduced to facilitate student pocket money planning which continues to be poorly managed for students in Indonesia, partly due to the lack of financial education. It also features tuition payment, attendance information systems, and academic information capabilities. In addition, parents are able to monitor their children’s activities to control and minimise children’s interactions to avoid drug abuse-related issues in the future.
Nitin added that open banking has paved the way for more financial entrepreneurs with more products and more available information.
In addition to financial inclusion, David believes that financial resilience will play a key role in building partnerships, especially for developing countries where internet connectivity may not be available. In those instances, open banking and APIs would become a mirage - consumers can see but cannot touch/access. Pak Yoga agreed and shared that it is important to encourage interconnectivity between different countries in the region.
Concluding the session, Nitin shared that open banking and ecosystem is essentially about collaborations and harnessing the aggregate potential. Over time, new business models will emerge due to the role digital technologies and APIs play in streamlining and accelerating interactions between all stakeholders.
With that, we look forward to the open banking and financial inclusion initiatives banks and financial companies will be implementing in the coming years.
Nominations for AIBP’s Annual Enterprise Innovation Award is now open for applications and can be submitted via this form.
Stay tuned for AIBP Channel Focus which will be held in the next few weeks. Do reach out if you wish to find out more about our upcoming sessions!