The journey from open banking to open finance+. The evolution of open banking based on API as of now and where it could go from here. Risks and opportunities for market participants.

1. Ecosystem evolution, risks and opportunities
Open Banking
@Kannan_sri1
https://www.linkedin.com/in/kannan-s/ *All opinions are personal.
Open banking and Fraud risk management summit - June 4, 2021.
Keynote presentation by Kannan Srinivasan.

2. Content
2
• Open banking – Primer
• Evolution of Open banking
• Ecosystem participants and opportunities
• Ecosystem risks
• Evolving into the future

3. Open banking - Primer
3
Consent based financial information sharing
✓ Customer consent to share data
✓ Bank/FI sharing financial information with
third party providers
✓ API (or other standard) based data sharing
✓ Better customer experience
Customers Companies
Banks
Customers Companies
Banks
Key Drivers
Region specific drivers
Customer expectation Technology/Competition Regulatory expectation

4. Evolution of Open banking
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Banks and individual companies built
interfaces for seamless processing
Path taken to reach current place
Web scraping
tech advancement
PFM Tools/ Customer Perception
Regulatory Requirements
PSD/2 in EU
Connectivity standards
Regional Regulatory Guidance
Super App / Big Tech evolutions
across the world (Platformication)
New business Models
Embedded Banking,
Embedded finance

5. Open banking evolution across the world
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México, Brazil, European Union, United
Kingdom, Saudi Arabia, Australia
Regulator led changes
China & Hong Kong, Singapore, India
Hybrid (Reg + Industry)
Industry led changes
United States, Canada, South Africa

6. Changing tides
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Who moved my cheese?
2010 2020
Source: CFTE - Centre for Finance, Technology and Entrepreneurship.
Upending business models
Connect, Transact, Expand
Evolution of top 10 Financial Institutions

7. Ecosystem – Opportunities
Potential for massive gains after adjustment
Banks & FI
✓ Increase reach across industry/new areas
✓ New client base
✓ Better underwriting models
FinTechs
✓ New/enriched customer experiences
✓ Pushing regulatory boundaries for clarity
✓ New Products
Companies
✓ CX/Retention
✓ Embedded finance
✓ New revenue lever
Data Aggregators
✓ Blend data from additional Sectors
✓ Enables competition
Customers
7

8. Ecosystem – Risks
Its not all smooth sailing
8
KYC – AML Compliance
Very costly to run independent KYC/AML Program and there are no easy alternatives.
Compliance is an important part of the puzzle to ensure wider reach of financial products.
Upcoming Regulations
New regulations may impact the balance/business models Eg:- Payment schemes in EU/ India.
In US, 50 different state laws cover a payment license. In some areas, regulations will provide certainty.
Privacy/CCPA
Maintaining data privacy will be a challenge for all participants.
Multiple DEV, QA Test environments across multiple companies – increased data leak potential.
CCPA will be an interesting challenge for data aggregators and the FIs.
Fraud
Entire eco system must follow toughest security standards as uber connectivity will
open up new frontiers in fight against Fraud. The scale and impact fraud could be a lot
broader.

9. Evolving into the future
The journey from Open banking to Open finance+
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Open banking
Open Finance +
Products
PFM/Data aggregation.
Capabilities evolution
Data Security/ Exchange
Deposits, Debit/Credit cards. Identity Management,
Authentication, Authorization
Credit Products based on new
underwriting models,
Investments & Insurance.
Regulatory Framework,
DLT, Smart Contracts
Products indistinguishable
between Bank and third
parties.
Standardization, Operational
capabilities
Financial products can be
offered at any customer end
point.
Cross industry data sharing
standards, New business
models

10. Questions ?
@Kannan_sri1
https://www.linkedin.com/in/kannan-s/

11. Thank you