As digital technology continues to become an integral part of the banking sector, it’s essential for traditional institutions to collaborate with technology partners ahead of the implementation of PSD2 in January 2018. Briony Richter speaks to CEO and co-founder of startup Bud, Ed Maslaveckas about the place for fintechs in the upcoming Open Banking environment.
Sharing consumer data among banks, fintechs and other financial institutions will allow consumers to view services offered by several organisations and identify the best financial products for them. Therefore, partnering with expert technology partners will undoubtedly play a key role in shaping the future of the digital banking ecosystem.
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Bud has built a platform for banks to build products on that use other company’s services. Customers will be able to view financial products and services offered by several third parties, but on one platform, making it simple and personalised at the same time.
Asked what Bud is all about, Maslaveckas tells RBI: “What we are doing is trying to create a new relationship between people and their finances.
“With Bud, we are leveraging some new regulation, which means that the experience that should start to reflect in your banking app is one where the consumer will be assisted across the entire financial spectrum. A consumer will be able to view and understand all their finances better in that one experience.”
The introduction of Open Banking in the UK will shake up the financial industry as we know it. Customers will have the option to share information about how they operate their bank account with third parties that will work to deliver the most efficient, easy-to-use solutions and an enhanced banking experience. It’s the hot topic right now but are we all getting swept away with the hype?
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By GlobalDataMaslaveckas adds that the change we will see with Open Banking will be more focused on the consumer.
“The transformation of banking, I think, will be the smallest part. The transformation in a person’s day-to-day life will be massive. Being able to quickly view accounts and conduct banking seamlessly will drastically improve the relationship people have with their financial information.
“Open Banking is a new sort of development to build upon. Banks have the will to progress, but they haven’t been able to exploit the way forward. If something is better and easier for people then there isn’t much that the industry can do to stop it. People will move to what services and products are more convenient for them. Tech providers like us can support banks in that sense.
“We see ourselves as a technology provider with regulation. We don’t provide the financial product; we provide the technology to change that whole experience.
“Finance is about big brands and large organisations. Not being a big brand has given us the freedom to do a lot behind the scenes.”
There is a real feel of community at Bud. The background of the employees ranges from artists to astrophysicists to data analysists, but more uniquely, there are people working here that have known each other since childhood, including the two founders. All are firmly focused on getting a more transparent picture of the consumer so that the most relevant products are filtered to them directly.
Maslaveckas highlights, that: “It’s all about looking at data across the industry. The data is crucial. We are taking all of the information we get, anonymising it and then separating it into groups so we can figure out how to improve the experience people are having.”
Open Banking brings more potential competition across the whole industry. For BUD, the competition isn’t banks, quite the opposite actually. Banks can be strategic partners, explains Maslaveckas. Recently Bud collaborated with HSBCs’ subsidiary first direct to build an app that will search through databases, bringing together data from financial firms to allow people to more easily manage their finances.
For Bud, the potential competition is tech giants like Google and Amazon. Reiterating this Maslaveckas says: “I’d be concerned about the time and attention they could take from the customer.” However, Maslaveckas has an open mind about partnerships. If a company fits the core values of Bud then there is always a possibility to work with them.
Looking ahead, Maslaveckas sees Bud becoming an even more innovative technology company that will be serving millions of customers and providing better experiences for them. He adds: “We want to broker a new deal between people and their finances but no-one will know who that broker is.
“It’s a strange ambition for a founder but essentially, the people who need to know what we do, will know that we are doing it extremely well and doing it everywhere we can.”
It is essential for banks to work together with fintechs like Bud. Fintechs are better equipped to conceptualise and collaborate with incumbents. Not only because technology partners provide innovative and progressive solutions, but because their strategy continuously looks towards the future. Together, this will create a thriving financial ecosystem.
