Recently, in the capacity of Head of Legal for Auka, I had the privilege of speaking at a conference “Innovation economics for antitrust lawyers” organised by King’s College London and Concurrencies Review, in partnership with Compass Lexecon, Freshfields, Qualcomm, Shearman, Skadden and White & Case.
The panel discussion title was: Banking and Big Data: Should Incumbents Get Access to FinTechs’ Data?
I was joined on stage by:
Whilst traditionally, financial technology and banking were once held to be separate, new capabilities in technology has enabled the two types of entities to find innovative ways to partner together and provide better offerings for their customers.
My perspective has always been that a strong and united collaboration between banking institutions and fintechs is inevitable.
As the realm of fintech continues to grow, banks are starting to understand the benefits of teaming up with fintech companies, but are also discovering there are new risks involved. In this scenario, more than ever, protecting customers’ data and privacy and maintaining trust is the number one priority for many of these institutions.
Banks that provide transparency into the benefits and risks of using fintech solutions, and utilise APIs to ensure greater control over the information shared with third parties will build customers’ trust. And, they will be able to provide an even greater range of competitive offerings.
So how do banks do this? As part of the panel, I explored how banks could partner with fintech’s to face the changing reality of open banking.
One way banks can develop such cooperation is through joining an existing scheme with a fintech. This brings only benefits as banks receive commission from their participation but do not bear any risks connecting with operating such a scheme. In my opinion, it is one of the best ways to face the fast changing reality of open banking. It helps to ensure that banks have the proper technology and human competence required to build complicated technological solutions such as a mobile payment applications. Whilst banks may have endless financial resources, they lack the intricate technology development skills.
Check this opportunity at: https://auka.io/blog/auka-launches-settle-europes-mobile-payment-app/
One key challenge that the entire industry needs to continue to work on is the education of consumers and the overall banking/fintech industry. Education is critical when it comes to data and privacy, which is still relatively new concept for many consumers. As an industry, we cannot assume that customers’ consent does not equal full awareness and insight of what privacy rights they giving away. What we do know is that the majority of the time, consumers are happy to consent without understanding the full terms and conditions.
The panel was a robust and dynamic conversation about the banking industry, the fintech industry and having access to data. There is no easy solution, but the best way forward is an open dialogue, and a strong push to educate consumers, businesses and the entire industry. If we’re able to collaborate together, continue to have these discussions, then I believe we’re heading in the right direction to ensure that consumers have the best access to payment solutions for the future.