B2B Payments

Open Banking Targets Pain Points — And Global Expansion

Open banking remains on track to proliferate across the globe, in spite of the coronavirus pandemic. Rather, market volatility may actually be propelling open banking’s expansion as FinTechs explore new ways to unlock bank account data to support cash flows of small- to medium-sized businesses (SMBs) and ease compliance burdens for financial institutions (FIs).

Below, PYMNTS examines the latest in open banking and bank-FinTech collaboration initiatives.

Brazil on Track for Open Banking Rollout

Brazil is mere months away from adopting its open banking framework. Nasdaq reported Monday (May 4) that its central bank revealed plans to begin implementing open banking regulatory requirements in November, confirming that the country will not delay adoption as a result of the pandemic as some analysts had speculated. According to reports, the central bank remains on its original timeline, with plans to fully roll out the rules by October 2021.

APAC Meets its Own Open Banking Needs

Financial regulators across the Asia-Pacific region continue to develop and build out an open banking framework, using Europe’s experience as a guide. Yet the market aims to create regulations that can meet APAC’s unique needs.

In a recent Deep Dive report, PYMNTS explored how open banking will evolve in APAC, where an estimated one-third of the globe’s 1.7 billion unbanked consumers live. At the same time, certain markets in the region, like China, have high mobile banking and payment penetration. As a result, open banking frameworks must take into account this contradictory mix of under-served consumers and businesses, as well as finserv sophistication.

Speaking with PYMNTS, Jinyoung Choi, IT and strategy department member on the Digital Finance Supervision Team for South Korea’s Financial Supervisory Service (FSS), explained the FSS’s understanding “that innovations often lead to heightened systemic, operational and cyber risks, as well.”

“[It] is focusing on enhanced, risk-based oversight and supervision in order to ensure effective consumer protection and financial stability,” he said. “We will also continue to fine-tune our rules and regulations to stay ahead of the [open banking] curve.”

Open Banking Adds Context to the SMB Credit Score

At a time when so many SMBs need access to capital, yet when FIs are growing more wary by the day about their own risk exposures, it’s essential for SMB owners to understand their credit risk profile. In a recent interview with PYMNTS, Glen Keller, chief product officer at U.K.-based CRIF Realtime, said open banking has made it possible to not only automate the process of analyzing and providing SMBs access to their credit profiles, but it has also expanded the data set used to assess their risk.

As Keller explained, data made available via open banking has allowed technology firms like CRIF Realtime to place SMB credit scores in the broader context of their past and present financial standings, as well as in the context of the pandemic, to help forecast their future cash flow positions and understand how much capital these businesses will need.

Ameyo Aids FIs With Virtual KYC

In an effort to aid FIs and other financial service providers with compliance amid the pandemic, India-based call center and engagement technology provider Ameyo is rolling out a new know-your-customer (KYC) solution. The tool is a video-powered platform enabling finserv providers to remotely interact with their customers for seamless onboarding without the need for in-person discussions. In a press release, Ameyo explained that the technology accelerates KYC checks and reduces drop-offs to help companies improve the onboarding experience for new clients while maintaining compliance and security.

Autobooks Loops Into SMB Bank Accounts

SMB accounting platform Autobooks, based in the U.S., is deepening its ties with users’ bank accounts. The company revealed this week that it has launched its Get Paid with Autobooks functionality, which enables SMBs to receive card and ACH payments that are deposited directly into their bank accounts without having to toggle between the Autobooks platform and other portals. In its announcement, Autobooks said SMBs can issue invoices and integrate payments on those bills directly into their accounts at credit unions and banks, while automatically capturing that transaction data for accounting and reporting purposes.

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LIVE PYMNTS ROUNDTABLE: MODERNIZING & SCALING FOR THE NEW NORMAL

The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.

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