Open banking will soon drive businesses with the power of APIs, we wanted to raise awareness about its impact on the Indian economy by sharing valuable insights on the challenges and opportunities present in Open Banking. To do so we organised an interesting Twitter Chat session on the 9th of October between 6PM- 7PM (IST). This virtual chat was led by Abhijeet Davane from RBL Bank.
Let’s take a tour of this amazing session:
#DigitalSuccess New age of banking services through technology where banking is present, not banks. Banks too are now realising the importance of being part of customer journeys than selling traditional banking products and services.
— Abhijeet Davane (@iamabhiee) October 9, 2018
#DigitalSuccess Business cant be done without risks. 😀. You have to deploy right systems, processes, & controls. Also customer awareness to ensure risks are managed.
— Abhijeet Davane (@iamabhiee) October 9, 2018
#DigitalSuccess 1/3 PSD2 is for payments. However in India acquisition, online lending and robo-advisory are equally on the rise. The growth of FinTech relies heavily on development and maturity of an ecosystem around it.
— Abhijeet Davane (@iamabhiee) October 9, 2018
#DigitalSuccess 2/3 Banks and most vitally the regulator are the biggest change agents in this ecosystem. Hence, for wider and universal adoption, India needs to adopt a PSD2 like structure as a whole.
— Abhijeet Davane (@iamabhiee) October 9, 2018
#DigitalSuccess 3/3 RBI with iSpirit has come up with draft guidelines on some APIs for Banks & financial institutions to follow under the new NBFC Account Aggregator master direction. I believe it’s the right step.
— Abhijeet Davane (@iamabhiee) October 9, 2018
#DigitalSuccess 1/2 Open Banking help increase the scale using the (#FinTech) collaboration. If implemented correctly with process automation it will bring operational efficiency resulting in reduction in cost.
— Abhijeet Davane (@iamabhiee) October 9, 2018
#DigitalSuccess 2/2 FinTech collaboration also take away the Mobile APP development, maintenance, Support & customer service in cases like payments where banks are in background. PhonePe, Google Pay (Tez) are classic examples.
— Abhijeet Davane (@iamabhiee) October 9, 2018
#DigitalSuccess Oh! its just started and can take few more players. I know few new names who got funding recently to jumpstart payments in India
— Abhijeet Davane (@iamabhiee) October 9, 2018
#DigitalSuccess 1/2 FinTechs are creating easy-to-use apps that with an uncompromised focus on customers’ interaction and experience, trying to capture the front-end of banks’ value chain.
— Abhijeet Davane (@iamabhiee) October 9, 2018
#DigitalSuccess 2/2 FinTechs can focus on customer engagement & interaction while banks are providing real-time backend support using API’s.
— Abhijeet Davane (@iamabhiee) October 9, 2018
This is a process. New trends ride on hype. People overestimate either the technology or human ability to adapt in the short time frame in which the hype scales. Then reality sets in, and we take a few steps back to course correct and start again. People and technology evolve.
— Abhishek Rungta (@abhishekrungta) October 10, 2018
Hence it’s always advisable to start understanding the long term vision and not short terms requirements of some business / partner. I know one of the big bank is suffering today with API Banking setup after manage to get around 150-200 customer/ partners integration.
— Abhijeet Davane (@iamabhiee) October 10, 2018
#DigitalSuccess 1/3 Yes, it has become very difficult for banks to retain their customers on their portals /Apps. It is very difficult for banks to compete with FinTechs in customer service and outreach. But FinTechs also depend on banks for their APIs.
— Abhijeet Davane (@iamabhiee) October 9, 2018
#DigitalSuccess 2/3 Hence, open banking has opened many ways for FinTechs and bank to collaborate and deliver extraordinary product and services to the customer.
— Abhijeet Davane (@iamabhiee) October 9, 2018
#DigitalSuccess 3/3 Looking at the pace at which open banking continues to grow, I am sure we could reach the maximum number of citizens and enable banking services to all.
— Abhijeet Davane (@iamabhiee) October 9, 2018
#DigitalSuccess 1/4 We have seen a lot of banks starting their own incubation centers, Hackathons, and innovation challenges to engage with FinTechs to drive innovation inside and outside the organizations.
— Abhijeet Davane (@iamabhiee) October 9, 2018
#DigitalSuccess 2/4 For instance, RBL Bank had organized a Hackathon in (July 2018) and partnered with 3 Winning Startups on cutting edge technologies. Recently, we have conducted an innovation challenge in collaboration with the AP govt and shortlisted 5 FinTechs for POC.
— Abhijeet Davane (@iamabhiee) October 9, 2018
#DigitalSuccess 3/4 Other banks such as Axis, ICICI are also engaging with FinTechs to deliver innovative products.
— Abhijeet Davane (@iamabhiee) October 9, 2018
#DigitalSuccess 4/4 e.g. would be, the collaboration between RBL Bank & Zeta offering meal vouchers as Prepaid Instruments, the partnership between PhonePe and Yes Bank offering UPI services.
— Abhijeet Davane (@iamabhiee) October 9, 2018
#DigitalSuccess 1/3 Customer behaviour is changing. They are looking for services that can deliver at that moment and in a personalized way. To some extent, this demand is managed well by the insurance, Retail industries by developing mobile app and reading the data.
— Abhijeet Davane (@iamabhiee) October 9, 2018
#DigitalSuccess 2/3 But, they haven’t been able to make the last leg (payments) seamless. They still need payment gateway integration and the customer needs to be transferred outside their app / website.
— Abhijeet Davane (@iamabhiee) October 9, 2018
#DigitalSuccess 3/3 Open Banking is the solution to resolve and make the payment instant, seamless and within the same app/ web page. Help close the transaction immediately. Increasing the sale and can provide multiple payments options to simplify the experience.
— Abhijeet Davane (@iamabhiee) October 9, 2018
Open banking can take different shapes for different businesses. It depends upon how that business visualize it and wants to use for. The broader the vision, bigger the impact, if done right.
— Abhishek Rungta (@abhishekrungta) October 10, 2018
#DigitalSuccess 1/4 A key challenge to solve in platform business models is a chicken-and-egg problem. Platforms are multi-sided markets, and without users on one side of the platform, it is difficult to acquire users on the other side of the platform.
— Abhijeet Davane (@iamabhiee) October 9, 2018
#DigitalSuccess 2/4 For example, few consumers will request a ride through Uber. If there are no drivers, users cannot book a ride and no drivers will join Uber if there are no potential riders.
— Abhijeet Davane (@iamabhiee) October 9, 2018
#DigitalSuccess 3/4 Ecosystems require network effects and positive externalities that add to each other and reinforce the utility and benefit its members.
— Abhijeet Davane (@iamabhiee) October 9, 2018
#DigitalSuccess 4/4 However, we argue that banks hav already solved dis challenge. With an existing large CM base, the banks already have the “chicken”. The next step is to facilitate network effects and interconnectivity between users and “the egg”, namely third-party providers.
— Abhijeet Davane (@iamabhiee) October 9, 2018
for a bank’s customers. To gauge third-parties’ incentives in creating value, we need to look no further than the existing scale of investments in fintech.
— sudarshan (@GalySud) October 9, 2018
The second challenge with platforms is to ensure that third-parties actually produce and create value for other members. The enormous opportunities to create and extract value alone are sufficient incentives for third-parties to produce meaningful features and applications
— sudarshan (@GalySud) October 9, 2018
#DigitalSuccess Almost every bank in India has implemented Open Banking platform. However @rblbank & YES BANK are the pioneers in the Indian Banking Industry to launch 'Application Programming Interface' (API) banking services.
— Abhijeet Davane (@iamabhiee) October 9, 2018
One big area that banks have ignored so far is their possible inroads into retail through seamless integration of retail I to banking (not the other way around).
The biggest retailers of the future will be the banks. They have the customer, payment – they need the inventory!
— Abhishek Rungta (@abhishekrungta) October 10, 2018
#DigitalSuccess 1/3 The inherent purpose of an open API is that anyone can request to view data. While a regular user would do no harm, the data is at risk from black-hat hackers who might use the data accessed from the API for criminal purposes, such as fraud & identity theft.
— Abhijeet Davane (@iamabhiee) October 9, 2018
#DigitalSuccess 2/3 Monitoring requests and responses of the API enable the protection of users, and provides useful analytics on consumer usage of the API.
— Abhijeet Davane (@iamabhiee) October 9, 2018
#DigitalSuccess 3/3 add'l., sophisticated authentication must be in place to ensure that d user or d device has d appropriate permission to edit or delete the requested data.This validation protects the API from unauthorised access & consequently strengthens the API from attacks.
— Abhijeet Davane (@iamabhiee) October 9, 2018
We thank @iamabhiee for an amazing session! It was great having you! 🙂 #DigitalSuccess pic.twitter.com/4eMe9cLgm1
— Indus Net Technologies (INT.) (@indusnettech) October 9, 2018
We hope you liked the session and found it useful. We look forward to having such more power-packed session in the future on #DigitalSuccess.
If you have any query feel free to contact us
