A platform to unleash AI innovation

A platform to unleash AI innovation
A platform to unleash AI innovation

A fintech expert delves into the impact of Artificial Intelligence on the financial services sector. We are all experiencing the tremendous change that technology is bringing in, in our day to day to lives. The pace of change was not like this even in the last decade and probably will be way more accelerated in the next decade. Even at the beginning of this decade most banks and financial services avoided anything open source and vendor viability was one of the criteria for selection of technology provider which ruled out most start-ups. Fintechs were looked upon with suspicion and were never considered a serious threat or potential partners. Technology decisions were for the IT honchos to make and innovation was never a formal charter for anybody in the bank, be it IT or the business. The dramatic benefits brought in by digitalisation and the mad scramble to jump into the digital bandwagon has changed all of that. The FOMO [Fear Of Missing Out] effect is driving the enterprise actions in all aspects that is linked to digitalisation and innovation. Chief Digital Officers / Chief Innovation Officers are no longer a rarity. Almost all banks are running their own fintech programs to identify, evaluate and partner with start-ups who they think can give them the edge. In the last one year we at Active.AI have participated in more than 20 such programs and have probably passed by an equal number. From the largest global banks to their different lines of businesses, top software vendors, be it the ones developing core products or the ones who are in services, the biggest management consultants, stock exchanges, the biggest of the insurers and so on, all of them are lining up fintechs and start- ups for their businesses to dive deep into the concepts and integrate them into their systems for a differentiated customer experience. During the same time the bank customers have also become extremely demanding and are much less loyal to a brand. They know exactly what they want and when and where they want it. The banks and financial institutions have hence been trying to reach out to their customers through channels that are more frequently used by them, like WhatsApp, Facebook Messenger, Skype, Line, Wechat and so on. Banks are also providing products and services which are not necessarily their own products. Be it opening up retail therapy or assistance in local transportation or finding the right home or managing the household budget, the banks want to be present in all life-style decisions of their clients to ensure stickiness. The third development that happened around the world is that the regulators and the governments also joined the digital party and came out with clear guidelines and country level technology stacks for connecting the various needs of the citizen. Starting from e-governance that lead to on-line payments between various parties interfacing with the government to complete opening up of payments systems like UPI and PSD2 that mandates banks to expose their customer accounts based on the customers' requirements to third parties. All the above three developments that are leading to the open API economy need the supporting infrastructure for the financial institutions to try out the hundreds of innovations by the start-ups/fintechs across the world. The need of the hour is to discover a large number of start-ups continuously, rapidly experiment with them to take the collaboration forward if it works, else fail fast and move on to the next idea. APIX is the market place that provides just that infrastructure as the perfect meeting ground for financial institutions and start-ups. APIX** will drastically bring down the innovation to production cycle for financial institutions and open the largest possible opportunities for start-ups to reach out to their customer base, without which at times can be a prohibitively high investment in proof of concepts. The reach of the platform has no real boundaries and while it started off as an ASEAN initiative, there is nothing stopping it from becoming a global exchange. As digitalisation and innovation drive banks to offer products and services way beyond conventional banking, no bank will be able to go through the journey on their own. It will be impossible for the largest of the financial institutions to manage such client expectations without the help of fintechs and start-ups that specialise in and constantly innovate in a certain field. If one were to take a few such examples:

  • Customers expect the bank to understand them intimately and be aware of their moods and sentiments and interact accordingly. For the bank to delight, this interaction should ideally be on WhatsApp in a conversational way and probably in the customers native language.
  • They do not want pesky loan offering calls at all times but they will appreciate if the loan offer comes when one is deciding on a high value purchase at an ecommerce site.
  • Restructuring loan repayments when one hears on social media that she has left her high paying job since she got bitten by the entrepreneurial bug.
  • Do away with passwords and allow login based on biometrics or out of band or behaviour-based authentication.
  • When the wanderlust hits one of your customers, can the bank package that Hawaii cruise along with currency exchange, travel insurance and a complete holiday plan.
  • If the customer wants to do her financial planning across banks and compare all the charges she is paying to her different banks in her own downloaded app, all her banks should be able to comply to her request.
There are thousands of such use cases being worked upon by entrepreneurs across the world at any point of time and another thousand is being thought of as we speak. There are various ways that financial institutions are using to reach out to these entrepreneurs. An APIX kind of platform can get them there way faster. The banks' own APIs also get tested on their ability to scale up for a large number of such collaborations. And for the start-ups, there is no better place to prove their concepts.

APIX - Application Programming Interface Exchange

APIX is a platform of the ASEAN Financial Innovation Network (AFIN), funded by Japan, the Netherlands and the United Kingdom. A global consortium led by Virtusa - which included Deloitte, Percipient and Fidor, has been selected by AFIN to develop, implement and operate the APIX platform. APIX aims to provide easy and seamless connectivity for business across industries via API integrations and a highly secure platform for them to collaborate and create new services that will help enhance customer experience. Bank and other API provider can upload and distribute product and service APIs on the platform, wheel this-party service providers (TSPs) and developers can easily discover and access available APIs and integrate them into their own applications to create new financial or lifestyle products or services for customer. Open API will offer an incredible collaborative opportunity for banks and different industries to launch new services and grow their revenues in a symbiotic manner. APIX provides a sandbox for users to test and experiment their new idea in a secure environment with just one simple registration. The result is higher operation efficiency and quicker time-to-market.

Tools offered by the APIX platform:

Discovery: An open space for Financial Institutions to find global Fintech; assess their maturity, compatibility, and stability. Experimentation & Collaboration: Find and try APIs from Fintech within the integrated sandbox and evaluate their technical feasibility before building go to market products.
Jaymalya Palit is a Senior Vice President - Products at Active.AI, a Singapore-headquartered fintech company.

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