OPEN-TEC made the most of a great opportunity to have a casual talk with one of the top fintech analyst in Asia pacific – Michael Araneta, Associate Vice President of IDC Financial Insights. With his analytical expertise towards financial industry strategies and technologies for over a decade, Araneta has been invited to deliver a keynote speech on fintech stages more than 50 times. Furthermore, being a financial advisor and analyst has given him opportunities to work with various sectors, like Asia-Pacific IDC analyst teams, enterprise executives, and key decision makers from leading financial institutes.
Driving Factor Towards Growth in the Fintech Industry
“Open-to-Collaborate is a key factor. There are many reasons for organizations to collaborate, especially financial institutes who need to develop new innovation at rapid speed, or to adopt available innovation from either internal units or external parties like fintech startups. Additionally, technology innovation which those organizations are now searching for, has to be applicable and can be further developed in a short period of time. These are a potential collaboration model we can anticipate.”
Michael Araneta emphasized that collaboration is necessary for the financial industry. Even though financial institutes already have business advantages from possessing Application Programming Interface (API), customer database and distribution channels resources, it might not be sufficient as customers are currently looking for better, more convenient and easy-to-access solutions from alternatives like fintech startups. These have high capability in developing new solutions continuously with less time consumed as well as have an intimacy with users. Therefore, collaboration and resource sharing between 2 parties would benefit the Thai fintech industry.
“Open Banking” Familiar Key Word Turning into Reality
It might be unclear to many people about how collaboration could become successful. This blog will illustrate interesting framework and examples from the thought leader, Michael Araneta. He explained that effective collaboration could begin with open banking which can be executed in many ways. Here are major fundamental elements of Open banking:
- Unbundling and re-bundling
- Services offered by 3rd parties
- Connection to 3rd parties via API and sharing some functions, applications and data etc.
“Opening channels to access data helps create business opportunities via various activities, for examples pricing, marketing, distributing product and service, crediting, decision making for third parties. You may think about how non-financial business can become a banking channel to open new account or to distribute bank insurance services, or even develop their own credit scoring model and offer for individual borrower. However, the collaboration framework is still depending on related organization’s strategy and operation practice in order to launch high quality fintech in Thailand.”
Remark: An example of open banking is opening commercial bank’s API to share data within banks and also share to 3rd parties like non-bank or fintech to access consent from customer.