The way in which traditional banks and financial technology companies interact with one another is set to change dramatically with the advent of Open Banking.
This concept, which has been formally mandated in the United Kingdom, promises to shake up the financial services industry by promoting more inclusive ways of working between traditional incumbents and digital players.
While banks around the world are already partnering with or acquiring fintech companies to realise their digital ambitions, Open Banking is likely to propel this collaboration to new heights.
Open banking is a business model that allows for the digital exchange of data and financial services at scale between banks and certified third parties. This will radically transform traditional banking value chains.
Through this approach, banks will be able to better utilise the data they already own. With the help of the right fintech partners, this data management can be used to inform the development of products and services that possess a level of specification never seen before.
This is likely to usher in an entirely new financial services ecosystem, where the role of the bank shifts markedly. The result will be the creation of new revenue streams, increased market reach, improved financial inclusion, accelerated digitalisation and cost reduction through automation.
Standard Bank is gearing up for this change across both retail and corporate markets, and is of the view that Open Banking is not a strategy in itself, but rather a critical enabler of our current strategy of digitalisation, customer centricity and integration.
By breaking down walls of the closed model in the financial services industry, customers can access their own banking data and use it to inform their selection of financial services offerings.
This means that banks will be challenged to develop more innovative solutions that are delivered with a high degree of customer centricity. This will be enabled by the exchange of data and financial services that Open Banking facilitates.
Through Open Banking, solutions can be built based on customer insights and tailored to suit a consumer’s behaviour.
Access to transactional data, for example, is useful in assessing creditworthiness and could speed up the time it takes for a loan to be approved. In the same breath, it could alert to warning signs based on the holistic picture the data provides on an individual’s financial standing. A major benefit for consumers who are unaware of potential opportunities or threats to their financial wellness.
By understanding more about how consumers spend and save, there is further room to develop purpose-built solutions that address specific pain points. This is expected to bring simplicity and convenience to a world that is often found to be full of complexities.
Open Banking promises to create a banking ecosystem where the playing field becomes level. Instead of competing against one another, there is an immense opportunity for traditional incumbents and fintech entities to leverage off one another’s strengths.
While fintech entities hold the technology skills and capabilities to bring these products to life, they aren’t necessarily able to scale the product across markets. This is where traditional banks will play a role.
It is critical that we partner with fintech entities or start to think like them to remain agile and quick to market with new solutions. Our market intelligence and expansive customer base across multiple African regions gives us the ability to take these solutions to market at scale.
When mainstream financial institutions partner with fintech entities who develop innovative solutions that are more accessible and affordable for individuals, particularly the unbanked population, we will see greater levels of financial inclusion.
While fintechs can provide these solutions on a one-to-one basis, an organisation like Standard Bank has the ability to take this solution to the masses.
We are already active in this regard and have partnered with or acquired fintech entities to bring digital solutions to the markets in which we operate with the aim of bringing more individuals into the financial system.
Standard Bank recently invested R61 million into Cape Town-based fintech company Nomanini, which has developed technology that connects informal merchants with distributors via an e-wallet.
The platform is expected to be rolled out across 14 African countries by 2021 and will offer retailers short-term savings, credit and insurance products. As these traders are informal and mostly deal in cash, the solution will enable access to financial services for the first time and help to grow their entities.
Financial services organisations are highly regulated business across the globe due to the nature and sensitivity of the sector, and it remains in the best interest of customers, partners and regulators to find and shape the best possible approach to managing an open access framework.
We have started investing in tech assets and are allocating resources to ensure that we drive a coherent Open Banking agenda across the group, with a focus on the safety of customer data and increased collaboration with fintechs, corporates, bigtechs and other third parties.
- Gwenaël Trotel is head of Payments Digitisation and Open Banking at Standard Bank Group
DStv Now adds free education to ‘lockdown channels’
In its response to the COVID-19 lockdown in South Africa, DStv is offering 16 free channels on its streaming app
Two new channels have been added to a free service being provided on DStv Now, the online version of DStv.
In response to the unfolding COVID-19 pandemic, DStv owner MultiChoice worked with local and international news channels in mid-March to add 24-hour news coverage to the DStv Now free service.
The company says the intent was to help all South Africans stay up to date with announcements and developments, and the results so far are encouraging. Usage of the service has increased 20% since the lockdown began, and peak usage is up 80% compared to pre-crisis peaks.
Now, in another step to help families through the lockdown period, MultiChoice has added additional educational content to the free service with the Mindset PoP channel. This channel features educational programming covering the entire General Education and Training (GET) phase, including Early Childhood Development (ECD), as well as a key focus on the Grade 4 – 9 curriculum.
The channel aims to prepare children for when schools reopen. Mindset PoP will deliver live lessons daily, with six fresh hours every day. A website is available for parents to download worksheets and information sheets to work through with expert teachers. Lessons are based on the South African Curriculum Assessment Policy Statements (CAPS) and are also aligned to the Cambridge curriculum.
“We’re extremely grateful to all of the channel providers for being so willing to work with us to help all South Africans through this unprecedented lockdown period,” said Niclas Ekdahl, CEO of the Connected Video division of MultiChoice.
“Thanks to their support we’re able to keep people informed, keep kids’ educations going, and keep people entertained.”
The full list of channels available to non-DStv customers on the DStv Now free service is:
100 – DStv
180 – People’s Weather
238 – SuperSport Play
313 – PBS Kids
317 – Mindset PoP
320 – Channel O
343 – TBN
400 – BBC World News
401 – CNN
402 – Sky News
403 – eNCA
404 – SABC News
405 – Newzroom Afrika
405 – AlJazeera
414 – Euronews Now
417 – africanews
To sign up for the DStv Now free service, go to http://now.dstv.com
FNB Connect cuts data price by 55%, offers 1GB free
FNB Connect has reduce its data prices by up to 55%. It is also doubling customers’ data on Lifestyle plans without any price increase.
This weekend, FNB Connect will also give all its customers 1GB of free data during the national lockdown, with a validity period of 30 days. This lockdown data allocation is in addition to the Free Connect allocations that customers with qualifying transactional accounts receive monthly.
“This will enable our customers to save on telco spend, which is a regular feature in household budgets,” says Raj Makanjee, CEO of FNB Retail. “Access to affordable and free data goes a long way in assisting our customers navigate difficult times and is also aligned to our ethos of offering real help when it’s needed the most.”
Shadrack Palmer, FNB Connect product head, says: “In our efforts to provide our customers with more value for their money, we’ve reduced our mobile data prices and doubled the data bundles on most of our Lifestyle plans, to give our customers more reason to connect anywhere and anytime. This is needed now more than even, as South Africans are observing the 21-day national lockdown, with many strapped for cash during these challenging times.”
The new data prices and doubling of the Lifestyle plans are to be repriced as follows:
“Since the launch of our Free Connect offering in July 2019, we’ve tried to remain consistent to see how best we can incentivise our customers when they need it most,” says Palmer. “As FNB Connect, we understand the pressures customers are facing financially and are committed to providing better value at every opportunity.”