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today we will uh talk about apis subject of this webinar is apis secrets to digital banking our presenter for today it's uh tom schweitzer todd schweitzer sorry he is the ceo of and the co-founder of at broncas todd uh please start with your presentation wonderful thank you uh thank you zoran and and hello everyone good morning uh good afternoon i am uh coming to you from manila philippines uh and hope everybody's doing well thank you very much iradian team nick and bonjour and zoron for inviting me to to join you all and hope i hope for the attendees this is uh helpful for you uh and looking forward to your questions uh as we go through i will try to keep this relatively short up front but hopefully this encourages lots of uh questions about how this may apply to your own business or in your market and uh and hope that this will trigger a lot of interesting conversations and i think mojdar will be able to help give input also from the from the origin side speaking about the bajda i'm sorry todd i forgot to introduce him uh will join us for the q a session to respond on all of the questions related technical questions related to uh radiant so the birds are welcome to to our webinar yeah first thank you very much thank you very much hello guys i'm uh really happy to digitally meet all of you i'm here for all your questions regarding gradient support enjoy the webinar cool thanks pojdar okay so uh today very briefly i will share uh just a bit about me and my background uh with when it comes to fintech and open banking and apis i want to give just a quick scene setting on how technology has impacted the customer experience because a lot of times when we're talking about apis and banking what we're really talking about is a shift in how customers interact with financial services uh i will give a very brief very simple uh outline and description of of of what are apis i am not a computer engineer i am the ceo not cto uh beaujodhar if there are if there are more detailed technical questions uh uh can can can definitely help out um but i will i do want to give an overview because i think apis the discussion around apis in banking reminds me a lot of the discussion on cloud maybe like 10 years ago where it's just not clear what the vocabulary is it's a word that's being thrown around and so we'll try to pull apart a definition and understand so the next time you hear about apis in a conversation uh you'll hopefully be a bit more equipped to to think about what it means uh we'll bring we'll we'll talk about apis and financial services we'll give some real world examples of what apis and digital banking looks like uh and then and then give a quick uh a quick a quick summary before going to q a so about me i was i'm the co-founder of bronchus we started in 2016 in indonesia and we now operate across southeast asia so indonesia philippines where i live uh singapore vietnam and thailand and what bronchus does and and and iranian and bronchus share a market in the philippines and and and we've seen a radiant at work um with some of the the banks and cooperatives here and it's it's fantastic progress that they've made uh for the i see bronchus role as solving the last mile for open banking and i'll talk a bit more about what open banking is but what bronchus does is as a technology provider to banks we sit alongside the core banking system to help banks and financial service providers very quickly launch api products uh and then and then similar to that we help fintechs access and use these same open banking products so think about it like on the supply side we're helping financial institutions provide a a greater you know supply of api products in the market and then on the demand side educating and making it easier for fintechs to use those apis uh and then i think the third thing in just for context is southeast asia financial services is a very interesting uh microcosm for fintech disruption because there's a lot happening here it's a very lopsided market so banks here are highly highly profitable uh but their their bread and butter is corporate banking uh not not consumer and sme so as unfortunately there's more than 60 of of adults are unbanked in indonesia and the philippines and vietnam for example it's also a bit of a battleground so tencent and alibaba are two very big chinese uh financial technology players and they are uh doing something of a proxy war across southeast asia so tencent and alibaba in philippines for example both of them are buying up e-wallet providers and lenders and putting together packages that are that are based on their their experience in in in china uh we also are seeing a wave of new challenger banks in fact today in the philippines there's another new mobile banking uh product that was just uh just announced uh so i think just in 2020 for example in the philippines there's four or five banks neo banks launching kind of mobile only banks uh and in indonesia i think there's already six or seven uh mobile or kind of digital banks that are launching so it's a really interesting region of the world for fintech disruption and and i'll i'll share a bit of that with you today okay so scene setting i just want to take give a a first an overview of just how fundamentally uh technology has changed the customer experience right so when it comes to movies and media we used to be limited to what was physically near you right whether there was a vendor that was selling vhs tapes or whether there was a a a rental shop that was close by um and now with with services like netflix or other streaming programs you can access basically the entire library wherever you want you don't have to wait for the show to come on your screen you can access it you pay a monthly subscription as opposed to every time you view so you pay a monthly service fee and then you get access to as much as you want whenever you want it on whatever device you want so we're changing the inventory and changing the the business model so that you can access that product whenever and however you want it all for paying a monthly fee right similar with transportation right so transportation only a few years ago you were limited to what is available near you or what you have what you own personally right so if you own a car if you own a motorcycle then you can get around uh you can use public transport if and when it's available to you and with ride sharing the transportation comes to you when you need it and i think what's interesting about ride sharing and you'll see the the link to to banking soon is ride sharing is not a completely closed system so when when i open the uber app or in in southeast asia the grab app it's actually displaying a map that is coming from google maps or a similar provider from google maps or when i'm ordering food delivery through one of these platforms it's plugging into the inventory or restaurant management system behind the scenes so you're not actually using a single uber app for example you're actually interacting with five or six or seven different services that are all plugged into the uber app right and that's what makes the experience so so uh so fun and useful is because it brings all these services in one single place for you i think shopping of course you know we all do online shopping it's normal for us now especially with kovid but i think what's interesting to point out here is not only can you have access to any inventory online but you can actually go to sites that aggregate inventory from other stores right so uh transportation is another example of this right we instead of going to a travel agent and seeing what's available and they print you a ticket you can actually go to a site like kayak and what kayak does is they will search 100 or 200 different travel sites and put all of those inside a single web page for you so what you're accessing is not the reason that a site like kayak can exist is because they are plugging into third-party uh third-party products using apis so that the kayak system can talk to the delta airlines ethiopian airlines klm airlines websites or inventory to understand what flights are available so my point here is is with these services you are not buying a a piece of software you're not buying one particular product in many cases you're accessing a product that is actually aggregating from 5 or 10 or 100 or 200 different uh different providers and putting them in one place and that is powered by api technology and so you can start to think about how that how that affects banking uh the last the last example here is aws and cloud right so as a startup ten years ago if we were going to start a startup we would need to the first thing we need to do before we have one customer is we buy a bunch of server equipment we buy five thousand ten thousand dollars twenty thousand dollars of hardware now with cloud-based services you pay only for what you use and you sign up on a subscription model and in some ways i think iranian's business model is quite similar to this maybe bojdar can can can share more info later but rather than buying a core banking system you know that costs half a million million dollars you can sign up on a subscription model and you pay for what you use so as your you know as your bank or your cooperative is ramping up activity you don't have to pay all upfront for the for the the large you know core banking system uh but this is this is a fundamental change right big picture what's happening is is is is four major trends and these these impact banking directly number one is reducing switching costs so reducing the cost of switching from one provider to another because you're not buying a box all at once you're using a subscription model number two is unbundling a feature so you pay for what you use right in the case of netflix or in the case of uber i pay for what i use rather than uh buying you know buying a car that's sitting in my driveway 95 of the time right shifting from a capex you know purchasing model to an opex model where you're paying a licensing or subscription and more granular accurate data because if you have access to this model you can then see exactly what's happening with your customers so this unlocks a lot of interesting things for for financial services um however uh a lot of what we've been describing has not been implemented yet in in in the financial services you know and banking industry i mean really despite all the changes to media to transport to shopping and retail uh even to to data and cloud management in many cases financial services is the same as it was 30 40 years ago right as a customer i can only access the bank's products through the channels that the bank provides right so only through the bank branch the bank atm the bank website the bank mobile app right that's different than many other industries where i can actually plug in use my account uh and and connect my google account for example two to a hundred different apps um very painful switching costs for anyone that's ever tried closing down their account and moving funds out of the bank they put a lot well since most of this audience will be from a bank i mean this is quite deliberate right is is making uh making it hard for your customers to leave even if they are quite dissatisfied and this is different than a lot of a lot of other industries right um it's hard to create your own product bundle and you as a customer i mean right so if i am a particular type of entrepreneur a particular type of sme it's not easy for the bank to provide me a solution a lending solution or a line of credit that's exactly tailored to my needs if the bank doesn't know how to offer that and they don't have a product team ready to deliver it it it it becomes quite an undertaking and then third uh fourth is i think customer service you know often customer service doesn't have visibility about what's happening uh and it's it's it's not a great experience for users so before i start talking about how apis relate to to banking i want to just cover what is an api and i think the i'm not going to go into too much detail but i will share some some analogies that i think are helpful and i think uh there's a company mulesoft uh that that does a lot with apis and they they they have a very simple analogy that an api is your waiter at a restaurant so what an api does fundamentally is it allows for communication between two different computer systems that's it it's a secure way to communicate between two different communities computer systems without needing to build a brand new custom pipe or some six-month project in order to have a customized way for computer system a to talk to b so think of an api as a restaurant raider he takes an order from the customer the customer wants a steak and steak and salad the waiter then takes down that order verifies that the customer wanted to make that order goes back to the kitchen make sure that the kitchen has still has steaks available and salad materials available and then comes back notifies the the notifies the the customer that the dinner is being prepared and then delivers the dinner once it is ready so you can think of an api as that as that waiter that messenger that's taking place sending messages back and forth between two different computer systems that is how when i open the uber app i can see a map that is displayed by google maps right um and so we'll get to how this works for for banking the very basic architecture uh for a for for an api system in a bank is you have the banking core which may be aradian you have internal apis so these are internal uh for internal use only they're not talking to outside external computer computers they're only talking to internal computer systems provided by the um that are within the bank so it may be one database talking to another it may be the banking core talking to a um uh to to to you know through a uh to a mo to the mobile app of the bank um but in general what you want is the internal apis talking to what is called an api gateway the api gateway is your security layer that that monitors all of the different messages that are coming from your external apis back into your core banking system without having apis and an internal and an api gateway you end up having to build a custom connection every time you're connecting to an outside piece of software so if that means you're building a mobile app and a web app or you're connecting to an e-wallet or you're connecting to a telco or you're connecting to a corporate client that wants to plug into their accounting system every single one of those would be a custom pipe what apis allow you to do is have scalability because you build the api once you you create that one messenger and that one messenger can talk to all the different uh partners that you allow to connect so the very basic architecture of bank apis is the internal apis that are talking to a piece of software called an api gateway you have private apis which are you which are not publicly they're not published on a developer portal but they're available to selected partners of the bank so maybe it's you know you provide it to an e-wallet company or you provide it to a subsidiary of the bank and then open apis are publicly available they're publicly available so that fintechs can build new products plug in your bank's apis so that they can create new products on your platform or on your behalf so i think it's important and in the q a we can talk a little bit more about what the the difference is between internal apis private apis and open apis okay now let's talk about what open apis mean in terms of banking right first off open banking is based primarily on two principles number one customers own their data so if i'm a banking customer i should have the right to access my data and i should have the right to interact with my data and share my data with third parties now maybe that third party is an accounting app maybe that third party is a a lending company that wants to offer me a loan maybe that's a loyalty company that wants to offer me a reward um number one customers on their data number two customers can access and interact with their accounts beyond bank owned channels and i'm going to share some examples of that in in the fut re but basically this means if i'm a customer of the bank i should be able to access my bank account i should be able to send money i should be able to see my balances even if i'm not accessing a bank channel like the mobile app or the web app or the branch so if i want to link my bank account to my accounting app or if i want to link my bank account to an e-wallet i should be able to do that and that gives me more choice as a customer but it's also beneficial for the bank as we will see so what is open banking open banking is customers being able to access and interact with their accounts through third channels so the consumer before would need to if he he or she has three bank accounts or three bank relationships he or she has to open three different bank websites in order to access the accounts and move money around with open banking i'm connecting to the blue computer screen could be my accounting app it could be a financial management tool it could be my uh you know my my money transfer app whatever fintech product i want to use and i give i give authorization for to connect my bank accounts to that app and that's done through apis because i give my consent and i say i authorize bank one to connect to my fintech app right so we'll show some examples of what this looks like but basically banks provide apis for third parties to securely access customer information uh for a few different reasons typically it is for identity so if i want to if i want to log in or access a certain fintech product maybe because the bank already knows my identity i can use my bank online banking login in order to access the account right uh apis are provided for transaction data they can be provided for payments so that i can send or or request a payment through a a third-party app or for uh additional kind of value-added services like loan application like signing up for insurance like doing credit scoring managing my credit or debit card um and the real benefit to a bank for open banking is that once they've built these apis these messengers the the additional cost of connecting to a to a partner goes down to zero because the connect the partner can access your developer portal they can see how to connect to the messenger to the api and they can then build a product around that plug in your api and it does not involve the bank's it team it doesn't involve scoping it doesn't revolve it and involve a compliance audit because the apis are already built the messengers are already built so you build the api system once and then you can connect to one or 10 or 100 partners in the future and of course this allows for much much faster product development and launching even internally so some examples so here's an example of open banking in the uk this is an example of one of my colleagues actually he's in the uk this is his lloyd's banking app so if you look at this is his app screen here are his balances and then he has an open banking button so he presses the open banking button he can then look at all the other banks available that he can link to his account right so he chooses natwest he then goes on to a a confirmation screen where he agrees for natwest to share account details account balance transaction deals and execute payments he hits continue and from that point on he can view his natwest account activity inside the lloyds banking app so here's an example in the philippines i mean this is actually from my e-wallet so there's a there's a mobile wallet called gcash in the philippines what i've do what i'm doing is i've i'm linking my union bank bank account so on my cash in i hit uh i hit tap right here online banks union bank now inside the e-wallet app i enter my union bank online user id and password this confirms that i am indeed a union bank customer in fact union bank asked me for a one-time password so this one-time password is sent to my phone i enter the one-time password it then displays my account information so do i confirm that this is my right account this is the account number and the balance i click yes and then i've linked the account this whole process takes about 30 seconds once my account is linked now i have a linked account in my gcash screen my union bank account is linked so then when i want to pull money into my union bank account all i have to do is select my account i select 500 pesos which is about 10 i confirm the transaction and it's done now what is happening here is gcash which is the e-wallet gcash is then sending an api request to union bank it's at what formally speaking what it's doing is it's calling the union bank api so it is talking to union banks api and saying hey union bank todd schweitzer wants to send us 500 pesos in order to use in his e-wallet okay gcash sends my online credentials which i have now saved in the gcash app and saying todd wants to send this and he's already confirmed this transaction using his online banking data union bank says yes that's correct please tell todd that it was a successful transaction and that's the screen here this screen here is union bank telling me that my credentials are valid that yes i have 500 pesos in the account and union bank just sent the payment another example in the uk would be starling bank now starling bank does more than having than have a apis for um for bank products they actually have a marketplace of third-party financial services inside the bank app so you can do loyalty you can access loyalty products insurance you can access savings and investment products this is like an app store this is an app store for financial services that exist inside a bank app and all this is powered by apis now a couple other quick examples and then we'll go to questions just to show how how powerful apis are this is not a bank app this is pipedrive which is a it's kind of like salesforce it's for tracking a deal activity for a sales team now pipedrive could build out a calendar they could build out email sending emails they could build out project management software but what slack what what pipedrive has decided to do is allow for all these different integrations with third-party apps now when you see the word integration in software think about if that is an api talking to a different uh software system so in this case i've linked our mailchimp account so that when we get a reply through mailchimp it'll immediately show up on the pipedrive system so whenever there's something that happens in in mailchimp mailchimp notifies pipedrive and then i see it right on my dashboard same thing with google drive same thing with calendar so i can schedule meetings inside the pipedrive app all this is done with apis so that mailchimp api is talking to pipedrive pipedrive is talking to the google calendar api this is the power of having an api architecture that allows the two different systems to talk to one another i think lemonade is another example for for if there are any insurance uh insurance providers on the call lemonade is not is they're an insurance broker but they don't have a shop they don't have a network of agents what they have is an api that any e-commerce company can drop onto their checkout page and so this in this case this is renters insurance so if i'm offering a real estate listing platform in new york all i can do is add a button to add renters insurance for five dollars a month and then i will get a 20 commission from that so it's an easy way for me to add revenue just by adding the the lemonade api so this is a company that is offering financial services entirely through api product so why do i say that apa is a secret to digital banking api i we you know we at broncos and i think iranian share this point of view that apis can unlock so much interesting product development and innovation for financial service providers because it allows for you build products with outside parties and it allows a much better experience because now your customers can can connect to their bank account using third-party apps why this matters for banks i think there's there's there's a a few different uh reasons why this is really beneficial for bank number one fee revenue all of these api products for a bank you can monetize you can charge a fee to the customer or you can charge a fee to fintech partner that is using the apis i mean it's after all it's your banking customers and it's your api so you might as well charge a small toll to use it right there can be platform revenue so think about starling bank where the marketplace of fintech and just like the android play store or the apple iphone they charge a platform fee to sales that happen on their platform so think about your your constitution where you can have third-party product on your on your site connected apis and then you're generating a 20 commission on every bill that happens from that third-party product right customer acquisition you're seeing especially with the kovid situation you're seeing a lot of banks investing in online account opening through fintech right so on an e-wallet app i can sign up for a bank through one of their partners data insights so by having apis that link a customer's bank account you can create a single customer profile and actually track a customer's behavior across many different apps and apps and websites and then lastly is product innovation by providing an ap ecosystem you can actually let fintechs uh build products for you and so there's a number of examples of of banks that have provided open apis and they actually the the the the innovative new products are actually built by startups by fintechs who plug into those apis and find a way to offer a really interesting new product uh to a to a particular type of banking customer right it's beneficial to the bank because they're getting a new customer they're getting fee revenue they're getting a higher balance it's great for the fintech because they're able to charge a sas model or they're able to take the revenue share and it's great for the customer because this is a product that didn't exist before so i think apis can unlock all sorts of value for for financial service providers whether that's acquiring customers generating fee revenue generating new data insights about the customer and just speeding up your product roadmap so that's all i have for now hopefully that was uh you know enough of an overview about what apis can do for financial services um so i guess we can stop there and and and and uh can can answer some questions um while we do that i'll i'll answer very quickly john carlos question do we need a central bank's authorization that is a uh excellent question uh because it is very very early days for banking apis in southeast asia for example none of the none of the southeast asia countries have a full open banking uh regulation yet so in many many times uh in many instances so the uk has a very robust uh and the eu have very clear robust uh open banking uh regulation and that that regulate how you use bank apis but in many many markets and especially in emerging markets the the the regulation around open banking and and using bank apis is not yet there so it's uh it's still quite early days and i think the way that we approach it at least in in philippines and vietnam and indonesia and thailand is by periodically checking in with the regulator being very transparent about what we're doing and then working them to working with this the central bank to ensure that uh we are complying with their existing regulations around data privacy and customer you know customer data while also you know frankly helping to educate the regulator on how to um design kind of best-in-class best-in-class regulation yeah in the case of bsp in the case of the philippines there is um there are some for for the for the philippine uh attendees i think um i can speak to the philippines directly yeah i think that they expect i think to be to be uh notified proactively before there is a new api product that is launched but there already if several banks union bank is one bpi is another that already have some api products already available thank you thought very much for your uh for your presentation now now we can uh turn on the camera so so people can uh can see our faces as well in this time of us social distancing there is uh the only way actually to kind of socially interact with uh with people so thank you very much again so can you please just move to to to to the to the slide with our names and the email addresses for the qa session okay it's the last one yes