K Nanda Kumar, founder and chief executive officer of Suntec Business Solutions, talks about how the company is leveraging current developments in open banking and application programming interface, his insights on how the financial services industry is responding to recent regulatory changes, and the opportunities in the market today.
K Nanda Kumar: We’ve been talking about this possibility for quite some time. As you know we, we’re playing in multiple industries. We are very focused about… our primary driver was creating an ecosystem of market spaces and the possibility of large organisation to create market spaces and which is more branded. When I say branded it means in a branded context, you are promising an experience to the customer in every touch point, right? So that was the kind of story that we’ve been telling for quite some time. So what is really making this open banking or PSD2 in shape is that it’s a regulatory requirement. So banks are compelled or mandated to open up their ecosystems. So, when you just open up for such a possibility, you got two possibilities of business model. One you can become just a utility player where you can be very good at what you are good. Focused on its cost and making efficiency in all your operations. So that’s one game. Another kind is you can go up in the value chain. Now that so many partners are in the ecosystem, how do you leverage them to provide totally experience, a total value base transaction to the end customer? To give you an idea, let us say a customer is coming from a mortgage. No customer wants mortgage. They want to … they want a house. That is the experience that the customer is looking for. If that’s the case, can you help the customer to get to a credited house and by the way, as part of it, you have to give it mortgage, right? So that might, would might require them to intertwine another and trying to give you the best price and deals or pricing for their properties… or giving since any information about the schooling and the other aspect the agents are looking for. So this is looking for much bigger game you are doing. So what we are saying is that we will provide the market, help banks create the market space were these partners can be brought as per a certain kind of commitment and experience to your end customers and your partners should support that. So in certain situation, we will take care of the entire settlement between the partners and managing the whole experience orchestration of the end customers. That’s the kind of space that which we have been using to as an opportunity.
Okay, to be very frank what were being done today from a technology possibility, this possibility existed 20 years back. But people were not just moving to that because of internal challenges and other pressures things like that. Now, regulation does helping one way to push people to that. So, that thing has a certain advantage. Ideally, it’s should have been left to the banks and other institution to do this on a strategic reason and it will have to be in this direction in the future and when the whole world become more digitally connected and adopt in a connected world. Naturally, the whole economics and all the commerce is going to happen in the digital world. And in that, the financial aspects of the trade and the economics are going to work. So banks have the role to play. But the question is, how do you take that experience to clear that? Moving to that space is mandated anyway and that time, it is going to be a connected world and we’re going to be connected by the APIs. So we see in certain markets like even in India, there are some customers, some banks taking initiatives of their own to create open APIs and you know, working with their partners and using them as channels to accommodate customers and all, and it’s already happening. And in some other places, we have seen the banks are resisting that kind of most, I mean in fact trying to restrict but, they’re all like, accept the fact that is some point in time this is going to be their future. So, regulation like this, it does help to push them for that, maybe you need a little bit of push to get to that.
If you really look at one area that it is completely getting disrupted is the payment space especially with the technologies like the blockchain and decentralised way of managing payment infrastructure and the real-time nature of those possibilities. It’s is complete getting disrupted. So, from our perspective, what do we do? We help banks to monetise these services to the end customer. We look at that from that perspective. This technology is definitely going to happen. And nobody will be going to wait for two days or one and a half days to get to your banks account and credit it. So, the faster payment is going to happen and technology like blockchain is going to make it much easier for this. So, to me, payment is one area that is going to be heavily going to be disrupted. So, we’re looking from that point of view and you know, we are enabling banks to utilise that channel, is giving options for them to leverage the pricing, to utilise which channel they want to help the customer to utilise. So, that is, how to monetise these new channels is what we focused on and we advised our clients based on that.
One is on payments. Another one is on blockchain and technologies and innovations that are happening and how fintechs are coming with a very, very point on possibility. And the third part is about the AI, artificial learnings, and artificial intelligence and the bots, I mean robotic process automation. If you really take a look at, these are the charters that is going on. So in a sense, everybody is trying to move towards more customer centric initiatives, and more of us tend are trying to create more insight driven engagement with the client. So these are the things I know of which, of course, SIBOS being a payment-centric, there is a lot of conversations happening on the payments side. But if I summarise the whole thing, if I have to take one single message is that everybody is trying to become more insight-driven in their customer centricity, of which there are going to enable payments faster, technologies like blockchain or anything that needs enablement, but the driving factor is the customer-centric initiatives.