‘By-product’ of EU’s Open Banking regulation comes to Asia
Financial technologies (fintech) provider, Crealogix, enables banks by integrating fintech startups to it, via a digital banking platform.
“We bring banks and fintechs together on an orchestration platform, that allows banks to still face customers,” said Crealogix’s Chief Strategy Officer and Board of Directors President, Dr. Richard Dratva.
He shared this during a briefing that highlighted banking trends in the European Union (EU), Crealogix’s main market of operations, and what its years of experience in that part of the world can mean for the Asian region, today.
Open banking and rebundling
The EU region is facing a more interesting-than-usual time currently, with regulations like Open Banking recently coming into effect.
Open Banking means banks are required to open up their customer data to third parties via application programming interfaces or APIs.
This removes the traditional bank’s decades-old grip on customer data and allows these data to finally be leveraged across different services. In other words, it isn’t trapped and siloed off for use by that one bank only.
Crealogix believes that instead of banks lamenting their loss of customers, they can view it as opportunity to finally be able to address other banks’ customers.
Crealogix is in fact a fintech player, but they are mature in terms of experience and offerings compared to most fintechs today that tend to be startups, still.
Its APAC MD, Pascal Wengi gave an example of another fintech company saying, “Apple Pay is hardly a startup.”
The Swiss-based company has no banking business model, something that sets them apart from most other fintechs, according to Wengi. It also sees itself as closing the gap between traditional banks and startups, by enabling banks to integrate them with the digital services of leaner and more agile fintech startups.
Crealogix began in 1996 with bespoke solutions and professional services. “All our products were and are still web-based,” Dratva reminisced, adding that they had also helped Credit Suisse offer online banking services.
Four years later, Crealogix went public. Ironically, 2000 was the year that the Internet bubble went bust, but online banking services not only maintained, it in fact increased.
Dratva said, this could be due to where Crealogix was located, Switzerland, which has the highest density of banks in all of Europe.
The beauty of their offerings then, was that it did not require them to totally revamp their direction and strategy as they evolved to the product-based company they are today. They offered electronic banking services then, and they still do enable electronic banking although it is known by a different name now – digital banking.
Theirs is a modular product. “Our flagship product, the DBH or digital banking hub was rebuilt five years ago. We cut and sliced it so that it is modular and flexible and able to address verticals and horizontal functions – that is our unique advantage,” said Dratva.
The DBH is also a platform that enables aggregation of data from other banks, because as more third-party developers build apps on this orchestration platform, they require more customer data to be able to offer truly seamless convenience.
Dratva viewed this as banks taking back their data. “It’s important to give data and take it back.”
With their orchestration platform, this is possible. Coupled with a beautiful interface on the front end called Gravity UX, Crealogix has taken on the role of a conductor, enabling the orchestration of a symphony of different applications for end users to take control of their wealth planning and transaction experiences.
Banks in Malaysia are looking to have offerings in the digital space, observed Wengi. “But it doesn’t make sense for them to develop their own platforms, when they are concentrating their resources on areas that are important for the bank’s strategy.
“Fewer banks are willing to spend on bespoke development on their own platforms, and you can’t use a core banking provider if you want speed for your digital apps.”
The situation requires a decoupling of the ‘big diesel engine’ at the backend from the ‘sexy’ front-end that end users will experience.
Wengi observed, “No one is enjoying (online) banking currently because the user experience is horrible.”
He also thinks a bank in this region, with the best offering in the market today is still very far behind banks in Europe. “Their strategy is one of best to be seen from a bank, but execution-wise, it’s a bit behind.”
For example, transactions are still not reflected in real-time on its mobile app.
He also opined that banks in Asian countries like Malaysia are interesting as they do not possess any legacy in digital banking.
“In the EU, a bank could have over ten apps, and just recently they are starting to talk about consolidating all these apps.
“Banks in Asia however started to move towards digital banking about five years ago, so there is opportunity to skip a whole generation of mistakes (in digital banking),” Wengi said.
To the APAC MD, now is a good time for banks in the region to build up their digital capabilities, as the market is set to change in 4-5 years in favour of more digital services.