BBVA API Market
“We want this to be a really useful event for the fintech community, from which useful ideas can emerge,” explained Shamir Karkal, head of Open Platform at BBVA and host for Fintech University, held on June 20 in Madrid. In an open, collaborative and dynamic atmosphere, the 200 participants at the event organized by the BBVA Innovation Center were able to debate and get to know at first hand the paths along which technology was developing today, in the company of international experts and entrepreneurs.
Chris Skinner (“The Finanser“), an expert in the fintech ecosystem, was master of ceremonies on a day when three major themes appeared in all the presentations and group discussions: blockchain, financial APIs and regulation.
“We are living the fourth great revolution in the history of humanity and a transformational period in financial services,” explained Skinner. This change in paradigm is marked by the infinite capacity to communicate from any place, any time, by virality, by the need to make everything faster and cheaper, including financial transactions… But who can we trust to do it?
“Trust” (in banks, fintechs, regulators and users) is the key word around which this revolution revolves. According to Skinner, “we don’t know where it’s going, but there’s no doubt it’s exciting.”
The transformational moment experienced by financial services thanks to technological innovation was clearly shown by the entrepreneurs participating in Fintech University. In the great majority of cases, this innovation comes hand-in-hand with the combination of open APIs of large companies and banks, such as BBVA, Google and Facebook, which allows them to transfer data from their databases and construct amazing products that would otherwise be no more than a dream.
Increasingly, fintechs are working with banks to launch an ambitious and reliable product. This means that the big banks must be prepared to open up and transfer their data (anonymized) to external partners (startups) in any part of the world, and these companies by definition are young, small and disruptive.
“If you look at what’s going on outside, you’ll see that there are not many banks working effectively with startups and helping them to be successful; many banks are still trying to decide how to take that step“, insisted Karkal. “At BBVA we believe that we are one step ahead and we have already launched an alpha version of our open platform that allows fintechs to access securely the data on our transactions and customers. We ensure that the final control over this information is in the hands of our customers, who decide whether the data can be transferred to others.”
Karkal and his team are at the cutting edge of the sector and have anticipated the recently approved European PSD2 Directive, which within two years it will oblige EU banks to transfer customer data to third parties if the latter approve it.
With the PSD2 the European regulators aim to stimulate innovation and competition, based on the idea that bank data do not belong to the banks but their customers, who can transfer them to other companies. “We love that, but as a bank, we also have to consider what happens to the privacy of these data, how the third parties store them, what they do with them, who is responsible if a transaction fails, etc. and that is the debate that interests us,” said Karkal.
The fintech revolution is already making its impact in aspects of our daily lives, such as payment by mobiles and instant money transfers with apps like Dwolla, Transferwise and Venmo. However, Karkal warns that financial innovation cannot be at any price.
“In this case the Silicon Valley philosophy of ‘move fast and break things’ doesn’t work. Here we have to move fast and ensure that we don’t break anything, because customers deposit their future lives in banks, their savings, their dreams…
In the rooms of the first Fintech University there was also talk, a lot of talk, about blockchain and how financial services can take advantage of this technology that has emerged from bitcoin.
However, if anything is clear it is that there is a great deal of uncertainty and doubt about the subject (“the 50 shades of blockchain” in Skinner’s words); but also promising projects in the medium term, such as the Hyper Ledger Project, headed up by the Linux Foundation and supported by major financial institutions, to establish new world standards for recordings transactions.
Further information about Fintech U:
You can also check a full summary of the workshop
Startups and existing companies in the process of digitization need a new set of digital tools to help them transform their businesses and get more in tune with their customers' needs. If possible, they should develop frictionless systems that do not create barriers to entry for the business, as occurs with some banking solutions.
A good cash flow management ultimately leads to more informed and wise financial decision making. Keeping operations up-to-date, knowing the cash flows well and discovering where there may be inconsistencies are just some of the processes that must be carried out on a daily basis to achieve this.
Taking a customer through the entire buying process until it is formalized is an arduous journey and one that faces the constant possibility of the customer leaving. However, there are ways to make the buying decision happen if you are given facilities such as agile, secure financing.