An Update On Programs In Eyal Nachum

Eyal Nachum , Bruc Bond’s fintech guru and board member, includes a message to banks: it’s time and energy to embrace open banking and also the cooperation it can bring. The advantages of cooperating with alternative providers far outweigh the hazards of loosening control, according to him.
The movement to a more open and interconnected financial world has recently begun, with clear steps taken both in the European Union plus Asian markets towards this goal. Europe’s Payment Services Directive (now in its second iteration, the PSD2) served because kickoff shot around the continent. It showed the banking system for the entry of so-called non-bank banking institutions (NBFI), who may have taken on large chunks of the labour previously created by banks. Rather than hurting banks, NBFIs have reduced banks’ workload while introducing additional revenue streams, providing a much-needed buoyancy float to your sector fighting downsizing pressures.
However, integration might be taken much further, says Eyal Nachum. If we consider the Chinese giants Tencent and Alibaba, we view a model banks may decide to imitate to a degree. The two companies operate Super Apps, WeChat and Alipay, respectively, less complicated more than payment services. These are so-called “lifestyle apps”, that allow users to do anything from ordering a taxi, through making interpersonal money transfers, to, in some Chinese provinces, paying bills and more. It’s simple to imagine the convenience that such centralisation brings.
According to Eyal Nachum, there is no need to consolidate everything under one roof, but tighter integration is possible and desirable. If we look for Singapore, we have seen the likes of DBS, one in the country’s leading banks, launching its very own car marketplace in partnership with sgCarMart and Carro. UOB, another leading Singaporean bank, recently launched its very own travel marketplace. These imaginative pursuits can be quite a lighthouse to European banks, who should employ whatever way possible to learn off their Asian counterparts, as an example by means in the UK’s fintech bridges, which Mr Nachum recently discussed using the Sunday Times.
Under the PSD2, European banks and banking institutions are mandated to provide application programming interfaces (API), where other banking institutions (like, as an example, Bruc Bond) can access data and issue authorised instructions on customers’ behalf. Sadly, a majority of banks in Europe did only the bare minimum to abide by regulatory requirements for open banking, rather than explore how such initiatives can be incorporated into banks’ strategic plans. This is a short-sighted mistake, says Eyal Nachum.
Banks are missing an opportunity to deliver their clients and customers which has a service that can actually get people looking forward to banking. This is with their detriment and endangers their long-term prospects. To be competitive in 2020 and beyond, banks must accept the platformification of economic services. Users has decided to come to expect it, and poorly prepared banks are affected as a result.
There are many paths with an open banking future, every individual financial institution will need to decide for itself which path will lead for the greatest prosperity. Some things, however, are clear. Trying to imitate the Chinese types of Tencent and Alibaba would be foolish. The regulatory infrastructure is placed against it. Instead, we at Bruc Bond think that close, tight-knit cooperation between loan companies, service providers, local authorities and business offers the right path to some bright future.
Such integration gives solutions towards the many woes experienced medium and small-sized businesses (SMEs) due the upheavals inside European banking industry, which Mr Nachum recently wrote about in an article for your Global Banking & Finance Review.
To reach utopia, however, we should build trust. Trust, we mean, between customers and institutions, and between institutions themselves. This can simply be achieved by true, sustained openness. Regulators can help, by mandating information sharing, nevertheless the onus is on the actors inside markets themselves to formulate frameworks that encourage cooperation. These might be limited schemes to begin with, that grow deeper as trust develops. Doubtless, this may require some feats of the imagination, however, if some from the brightest minds build relationships these issues, they are able to, we are confident, come up with some creative solutions on the issues that vex bankers. The next banking revolutions demands it.