 Hello everyone and thank you here for joining us for another lovely talk, tech talk that we are doing here with Vissam Khuri, who is the general manager for both for Finastra, both for the APAC market as well as Middle East and Africa market. I mean, you know, Vissam has such a colorful career of about 20 years in financial institutions and working in the financial industry that he has spent. And today at Finastra, he is probably looking at one of the most important aspects of FinTech, which is open banking and innovation and digital transformation of banking. Welcome, Vissam, we really appreciate you are taking our time and talking to us at Entrepreneur APAC and would love to hear, you know, APAC is one of the most forward markets when it comes to FinTech and you know, some of the, they have been very early in terms of whether it's in Singapore or other markets within Middle East Asia, we see the kind of FinTech sort of forwardness that they have shown, which has not been shown by the other markets in the world. So would love to know about your views as to what you think is the new normal of banking that we are likely to see in the coming time. So, you know, let me start with one of the very basic questions and because, you know, we're talking to one of the smartest FinTech markets in the whole world, what kind of FinTech trends do you see in APAC in the coming times? I mean, you know, and given the fact that pandemic has already given us better leeway to for digitization of banking and for better FinTech capabilities to be built up, what kind of new FinTech trends is it that you are seeing happening now? Sure. Thank you very much for having me Ritu and for your kind words. I look forward for a very interactive discussion. And like you've mentioned, let me start from the end, definitely the pandemic has accelerated the requirement for digitalization. It has brought really the future forward in the best way to describe it. Even before the pandemic, the rush for digitalization has been at the forefront of financial institutions and has led to the emergence of FinTechs. And I'll be dismissal if I don't mention that the key advantage or the reason why FinTechs have been created mostly comes from the concept of open banking. And for the audience that are listening to this, to define open banking, it's simplistic for open banking is to be able to share financial information with third parties. In as simple as it sounds, but that has created huge possibilities. And these possibilities are around creation of FinTech smaller organization that can utilize this financial information in order to create user friendly solutions that are targeted for two main reasons. Number one, increase customer satisfaction and make sure that there's competitiveness across the financial services. And number two, obviously create a new and innovative way on in terms of digitalization and creating new services. And back to your question. What do we see the trends in FinTechs? The trends that I can see in FinTechs, we can talk a lot about specific apps or specific applications, but the major change in the FinTech world, in my point of view, is the collaboration is the concept of opening, open, not only open banking, open banking, open APIs, open collaboration. If you don't have open APIs, which is the best way to describe it is the technology that allows to share data in a very safe and secure manner, then open banking will not exist. So the biggest trend, the biggest thing that I can see changing in the coming two to three years is the nature of the collaboration between FinTechs and traditional incumbent banks. Previously, if you think of it, traditional banks used to look at FinTechs as a main competitor. The biggest problem for the financial institution is that they never knew who the competitors could be. And these days, Amazon could be a competitor, Google could be a competitor with all their payment tools and all the rest. So at the forefront of it, they said they were like, oops, there's a new competitor in the market, what should I do? Later on, they found out that the only way that they can write that way for digitalization is to collaborate with these FinTechs. And open banking is the only tool that allows for that collaboration to happen. So in my point of view, our next development, and we can talk about it, is the evolution of financial services and the solutions provided in the market. If you look historically, as a financial service provider, as Finastra, and being one of the third largest in the world, we started by going to a bank and telling them what do you want, and we created something called a project. Then we moved to productizing that project, and we started selling products. And then we moved again, and we started selling solutions. These days, we are selling more of an open platform. And we're moving ahead. Next level is to become a marketplace. And in the open platform and a marketplace, FinTechs have a key role to play in the development of financial services. Sure. And I think you rightly said that banks never thought that they were going to have any kind of competition. And I mean, nobody ever expected FinTech to pave out the way it has. But today, you know, they're facing competition, whether it comes to credit, you know, there are, in fact, we've seen already these small non-banking financial institutions which are providing payments today. And then there are now different payment gateways for cross-border transactions, as well as for domestic transactions. So particularly, you know, in the coming times, how do you see the banking system changing or, you know, in the next four to five years, do you think banks are going to cut down on certain roles and sort of become heavier on, let's say, only debt or some other functions? So I mean, is there some kind of future phase for banking also that we are thinking about? That's an excellent question. And I can flip that around and say, what will FinTech mostly contribute to the new evolution of the banking services? And to answer that, if you allow me, let's talk about the differences between FinTechs and banks for one second. There's a natural difference between both. So in a survey we've done a couple of years back, we've asked banks how much of what you do, you put the customer at the center. And we got replies of around a bit over 50% of all what we do is customer focus. And that's normal. And mainly for two reasons, if I want to narrow it down. Number one, banks have different considerations, risk management, regulations, compliances, and that hinders them from becoming only customer-centric. Second, technology. Banks have been there for ages. It's one of the oldest things that happen in the world. So they are hindered by technology. We've asked the same question to FinTechs. How much of what you do, you put the customer at the center. And the answer was in the top 80% of all what we do is to put the customer in the center. This 30% or so difference between the two has created that, if you like, gap between what banks could offer and what FinTechs could offer. So if you look at the banking services today, obviously we're going to move to digitalization. What will banks differ in terms of offering services? A couple of things. And this is exactly what we do. I first introduced FinAstra as the third largest of one of the three large companies in the world, but actually that's an old definition. As of 2020, we define ourselves as the first open platform for collaboration and finance. So we have created a platform and that platform will allow the conventional banks to be able to expose their APIs and invite innovation from anywhere. Innovation cannot be cannibalized by anybody, not even us. So by utilizing that platform, banks could be able to rely on their own developers. They can go to any system integrator. They could go to any FinTech and start adding their services on top of the solutions that they have. So the main change that I see from the financial or banks in terms of services is now they're going to offer third party services. It's not going to offer their own services in a very consumer digital focused manner. Banks today, what's the biggest threat for a bank? The biggest threat for a bank is customer satisfaction and customer loyalty. Banks have big balance sheets and they continue to be profitable in comparison to FinTechs, but they are losing customers because they are not customer centrics. On the other hand, FinTechs have small balance sheets and it's their own business, like any internet company, they know how to acquire clients. That's their business. Their problem is profitability and margin and that's an inherent problem by the definition of FinTechs. By combining both under a platform, that brings value to both of these, the FinTechs and the banks, in the benefit at the end of the consumer. The consumer can be irritated like you and me, such as payments and can discuss that and the growth of payment. Or it can be a corporate or small medium enterprise on any type of business that can benefit from this collaboration between both. What are the regulatory hurdles do you see, particularly from central banking authorities of a country, because they have one to control the bank. So now they would obviously, I don't know, maybe I would say become an impediment rather than a friend in this collaboration to happen. So what kind of regulatory hurdles are there for this collaboration to happen? Your comment is spot on when we did our own survey in Asia pack and across the world, 56% of our respondents said that the regulations are not in place in order to facilitate the growth of FinTechs and the digitalization. Because look, open banking, the idea of open banking has to be the number one supported by regulations, like you said, banks are highly regulated. And number two, technology has to be standardized in order for it to operate. There are lots of regulators that are facilitating this, but not enough. When I say facilitating this, I can give you lots of examples in Singapore or in Hong Kong, where the open banking framework has been well defined. In Singapore, the adoption of open banking is enormous and keep in mind that they haven't made it even mandatory. They have just created the flexibility and the encouragement for the financial institutions to go into open banking. In Hong Kong, similarly, since 2018, if not before, they started also pushing open banking concepts. Having said that the regulation is not standardized across the globe and it's not definitive on how that collaboration could happen. In my view, what regulators could do is to encourage putting these two together and not only allow for open banking and open APIs, but encourage the synergies between the two. In India, for example, and I know we're discussing you're based out of India. India is a market where the regulators have created companies or non-financial companies in order to provide financial services, which is not part of the banking sector, which has created a bit of friction. The payments in China, for example, has been enormous in terms of digital payments. In our study, we've seen that actually in a third-party IDC study, I've seen that over 99% of non-cash payments in China are digital payments, such as WePay or Alipay or these types of payments. And this 99% of the transactions that are digital via wallets account for almost 45% of the global transactions that are coming via wallets. So payment is definitely one of the biggest routes that have penetrated open banking and the regulations have helped with that. Is there a room for improvement? For sure. Is there a room for standardization? Definitely. And this is happening in different countries at a different pace, but the trajectory is very well known. Open banking collaboration is the way forward for the financial sector to be able to advance and provide innovative solutions. Sure. You mentioned that the different payment gateways in China, similarly they are in India and lots of other countries now. And while I totally agree that digitization is making, and particularly digital payments, if I can talk about it for a minute, is making our life easy. But it's also getting already becoming, and it's still early days, but it's already becoming a very competitive landscape there. I mean, you know, if you're an e-commerce site and you realize that one payment gateway is offering you more discounts if you sort of use their gateway to buy something out of an Amazon or some place. So now, you know, now instead of making it very consumer friendly, it's becoming extremely confusing for the customer if you really ask me as to, you know, I mean, because it seems that he has to, then he or she has to spend a lot of time in trying to figure out what and how to do things. Now, while I understand competition is healthy and it keeps everybody on their feet, but I mean, for the customer point of view, how can we make it simpler for him to choose his or her or stick to one payment gateway and then be able to, you know, access the whole world and have the best of your offers which are there. How can it all become more collaborative instead of competitive? You've said the right word. How can it be more collaborative? And regulations is one of them. This is the starting point. The second is the true implementation of open banking and the evolution of fintechs. And if you allow me as my personal point of view, like you've mentioned, there are too many payment gateways. There are so many retail payments that can be used across multiple forms. The margins on payments have minimized. If you ask my personal point of view, in the coming near future, the margins or the profitability you get on payments going to be minimal. Payments is going to be to retain clients. You're going to offer payments in certain areas almost free of charge. And especially when we talked about the unbanked or underbanked communities, which is huge growth areas. If you ask me, look at Southeast Asia, 70% of the population is unbanked or underbanked. If I'm a financial institution, I'll be more than willing to provide payments for free if I can bring this money back to the financial sector. I'll give you one example. And this example is because of a client that has announced partnership with us earlier in the year, Tonic Bank. Tonic Bank is out of Singapore targeting the Philippine market, targeting the unbanked. And in some of the discussions I've seen, they are targeting, there's around 140 billion dollars that are not in the banking sector. So they are talking to these people, which will generate around 100 billion of unsecured loans that these can bring more margins to the bank. So in my point of view, the consolidation will happen based on highly competitive and the ones that will retain are the ones that are going to be collaborative working all together at one point. And more importantly is the ones that will be able to offer additional services on top of payments to be able to increase their margins. Sure. And I mean, this is your payment side, but then you also, I mean, if wait for a minute, I can take you and look at the credit side of in banking. Again, you know, I feel that the same rush, everybody offering you that 0.005% less value for your credit or your loan is almost killing it. So, you know, how can you actually, and you know, and honestly, even I felt even since credit card payments, it's very confusing for the customer to, you know, keep account as to how he's spending and how he's built and how he's going to repay. So, you know, how can we make this entire process much easier, you know, technology, while it's making our life easier, but it's also making the customer life extremely complex because he has no clue how calculations are being done by Al Gore. You're actually your spot on. And if you review the concept of open banking and I keep going back to it, how did it start? It started actually, and I'm going a little bit technical here. It started with the UK competition and market authority where and then later on the Europeans followed it with the PSD2, if you remember, these were the two concepts that have created open banking. So the first concept with the UK competition and market authority, it's because of the exactly the same reason. As a consumer, you are not aware of what are the charges that are being charged to you. You cannot even compare between one back to the other because of hidden charges because of so many things. And they wanted to increase the competitiveness of these offerings, thus saving some money and making it much easier on the retail customers. This is where they have created the concept of open banking. Let me give you an example. I'm not sure about you, but I do have two bank accounts and I want to consolidate both together. Without the concept of open banking, no way I can do it unless I do my own Excel or blah, blah, blah. Now, with the concept of open banking, there are so many fintechs that can be generated in a garage of four or five people that can create an app that can aggregate all my transactions within two banks and can, number one, give me comparison. So, Mr. Wissam, you have a mortgage. What are you paying on your mortgage? You've mentioned 0.025%. Because open banking allows to see all the offers from all banks, it can tell me, am I overpaying? Am I underpaying? Where should I change? Which bank I should go to? In one place, in one app. So that has created that flexibility for the technology will allow you to create that flexibility for the end user via the fintech to aggregate this information and they have one stop shop. You've also talked about personal financing. If you have multiple accounts and you have multiple transactions, having that fintech utilizing the APIs on a platform will allow you to manage your finances much better and you become financially literate. That's the entire objective and you've mentioned as a consumer, how do I know? The objective is to increase literacy by providing aggregation and collaboration and put the power in our hands as users, be it individuals, again, or corporates. And that's the entire purpose of having a collaborative platform type of interaction between fintechs and banks. Just for our understanding, tell us a little more about Finastra's biggest market. I mean, you know, since you mentioned with you, one of the largest sort of API collaboration open banking in the world. So what, I mean, in terms of globe being your entire for the playground, then what is the biggest market you have right now? Perfect. And thank you for asking me this question. Being a company that's one of the largest in terms of employees, revenue and all the rest in fintechs, every year we have to come up with something new. And actually, on the contrary, we lead the way in how the financial market works. We are also connected with some regularities or financial bodies such as SWIFT and the rest in order to define what's the future of this market. And what do we do? And you've mentioned we pride ourselves now to be the first and true open platform for innovation and collaboration. Our objective, our mission with Finastra is to unlock the potential of people and businesses in a way where they can collaborate together. So what do we offer? Or what are the, what are our differentiators? We were able to create a platform that's called fusionfabric.cloud that can be deployed by banks. And this is our latest developments that can be deployed by banks will have access to their internal systems through exposed APIs through any third party. So it can be a fintech, it can be a developer, it can be even a university, anything you want to kind of develop their own app utilizing our own APIs. On that platform, we've also created with partnership of Microsoft on a cloud where they can deploy their app and manage that app. And we've also created a place where people can go and download these apps. It's like a store, like Apple store or anything. So we've created our own app store. When we do that, then that will enable all these financial institutions to truly collaborate and create, I will take it one further step, a marketplace. We've discussed what's the problem of fintechs. Fintechs, the problem is to increase their margins. How can they do that? If you are a fintech that is running on our own marketplace, you have all our 8500 customers that can contact you and can download the app. If you are one of the 8500 customers that are really requiring true innovation, you want fast time to market, you can pick any of the apps that are available, that are partnered with us and with the deployment of four to six weeks. You can actually come up with a new solution. For banks, four to six weeks is nothing. It's a drop in the big C because usually projects takes one years and two years in order to implement. So this way of implementation, this way of coming up with services doesn't exist anymore. This is the latest development that we are doing. If you allow me, this is on technology. More importantly on the verticals. We've mentioned payments in order not to have this discussion all on payments, but the real growth that we are seeing in the market is challenger banks. If you are a challenger bank and we've mentioned tonic for example, that you have a solid business plan and you want to go up and running within six months and you want to target a market and you want to do it all on cloud and you don't want to have any IT developers and you want to outsource anything that is not your domain expertise. You can come work with somebody like us with our own partner ecosystem and you can launch your solutions very fast. Give you one example. The biggest cost for the bank is to acquire new clients. So acquiring a new client onboarding a client is technically if you look at it costs lots of money. We provide a platform. Let's assume, let's assume we don't have a solution in order to acquire a new client or client onboarding. There are so many fintechs in this world that have created a way where you can onboard a client digitally in a very fast way. I can promote one of them, but let's not give one of our partners names. One of our partners have created an application via your iPhone via your app. You can go up in a bank account, take a picture, do your digital signature, integrate your core banking system and in less than four minutes you have a bank account with a digital signature. Digital signature, it means regularity has to approve it. So there's always regulations there. This is just a small example of the growth that we are focusing on such as digital banks. So payments, challenger banks, also the latest one is technology. And here if you allow me, because I like these examples, if you go today to Amazon and you do one or two searches, you will be bombarded with suggestions. Do this, do that, do whatever. And you've just done a search for a book, for example. Can you imagine how much data the bank has on you? He knows where you have coffee. He knows where you fill your gas. He knows what clothes you buy. He knows if you have a car. He knows your travel habits. They know everything about you. And we have artificial intelligence, we have machine learning, we have all the technology in the world to analyze this data in order to come up with a very personalized, specific, not suggestions, even offers. Two, three years back, the best thing the bank could do is a leaflet telling you, come mortgage, we are 1% cheaper than the bank next door. Very generic. These days, what we are allowing these banks with a combination of fintechs, where they develop everything, a combination of data, which is very abundant, add to it technology that's already available such as AI and machine learning and cloud, add to it a marketplace, gives you huge possibilities, huge possibilities to really drive change in the financial market and offer new solutions that are targeted in my point of view for three main reasons. Number one, customer satisfaction. As a consumer now, you demand same service from your bank, like from your retail store, exactly the same. Number two, increased profitability because you are coming up with a new innovative solutions that can bring some extra margins to your business. I want to stop on this to talk a little bit about SMEs. I've read a McKinsey report not long time ago. They said that there is a staggering amount of around $8.5 billion of fees and charges that the bank could charge for SMEs, small and medium enterprises, if they truly offer a fully fledged automated digital experience. So if the banks do this, they're going to increase their margins. So client satisfaction, increasing your margins and number three, remaining relevant for growth. This is what we believe is the future of what we are offering to this market. Sure. And I think you're looking in the right direction. That's for sure. You know, finally, I could want to know, I mean, you know, given the fact that, as I had said that APAC, particularly if you see Singapore, if you see Hong Kong, they've made some great strides when it comes to fintech. So what do you think? And then of course, I also feel that the Middle East itself is doing a lot of work in fintech to Bahrain have their own, you know, fintech area. So do you think the way forward in the next three to four years is for fintech to really move globally or for every country to develop its own sort of fintech startups and therefore be able to, you know, see that our country needs these solutions and therefore, you know, we're going to make our own fintech properties. But as an organization, you're a global organization, Finastra. So I mean, what is the way forward? And how do you think the best practices can move from between one country to the other? Perfect. Your question is spot on. And I answered it, you need two things. You need standard regulations and standard technology or formats and standard procedures. Like we do with everything, like fix, like Swift, like you name it. Once you achieve these two, then it's limitless what you can do. I see that any fintech being a large technology company can operate globally. Of course, there are some localizations. Of course, there's in India or in Singapore or in Bahrain, they might have different requirements than others, but in general, probably 80% of the requirements for banking services are the same. So the fintech, in order to be able to operate globally, it has to have standards and it has to have the common regularities. And that's the future growth for fintechs, which is dependent on regulations in most of the cases. That's why if when we did our own survey, there are 54% of our suppliers said the government or the regulations are the main hindrance for the growth of fintech and digitalization. So in terms of changes, I don't believe that what is required is a small fintech by country, but what is required is standardization of regulations. And you've mentioned Bahrain Fintech Bay or DIFC or in Singapore. These are just one step that the government is doing, which is a very important step to encourage fintechs. Because fintechs, think of it this way, fintechs, biggest problem is funding. They are small, they don't have the money, and they need some encouragement. Creating a sandbox, creating an environment, inviting people such as Finestra, which we are very abundant with regularities. Bahrain Fintech Bay is one of our main partners where we provide for free the infrastructure to encourage these fintechs to build. So these are encouragements in order to make sure that this will advance. But to reach where we want, we need standardization. That's the only way where we can advance as globally and come up with a solution that's standard and really put us at the forefront of innovation and not be considered in financial sectors as laggers of technology, but rather the best utilizers of technology and the purpose of having best and better customer service and customer experience. Sure. So finally, as we end this talk, I mean, you know, I would love if you can tell us what could be better ways for fintechs to raise funding. I mean, I talked to a lot of fintech startups and I said the problem and you also said that fintech funding is always a challenge. Do you think in the future there would be more institutional funding the fintechs will get from venture capitalists or private equity firms? Or do you think it would be one fintech supporting the other fintechs? They might want to invest in some other fintechs because there are some synergies they have between each other. This is an excellent question. Let's end where we started with COVID and the pandemic. The pandemic and the economical slowdown has created a burden on these small fintechs. They cannot afford to survive. So yes, some fintechs will disappear if there's not enough funding that's going to come to help them. And where will that funding come from? In my point of view, you are spot on. It can come from many sources, but most of the sources in my point of view is other fintechs such as ourselves investing and helping and funding. And the second part is the banks themselves. Also I've mentioned that banks initially looked at them as competitors. Now they're looking at them, how can we collaborate? And they have found at least three ways of collaboration. Number one, they invested themselves in fintechs and they can go all the way to even create a new bank under their own umbrella with a different name. And it's a window for digitalization and all the rest. Second, they invested in fintechs that already existed either for them to totally work for them or just takes some stakes in them in case these have grown. So if you talk to a CIO of a bank now, he will tell you you have a budget to invest in fintechs. Third, how would they get their funding? Maybe better than funding is to get market opportunity and access. And this is where Finestra comes in. I can go to any fintech as Finestra, rather than giving him X dollar to survive for the coming two months, I can tell him, please come to my platform. I have 8500 clients. I have 95 of the largest banks on my platform. Bring your application in and let's work together and commercialize that solution. So who ever has the biggest community? Of course, that's the definition of a marketplace and this is how us and banks use our size, our contacts, our clients in order to advance that, if you like, that's fintech and that's a new business. And I think this model will work very well for in the future. Great, and we hope to see many more fintech companies like Finestra to become bigger and larger and going across the world and helping other fintechs to also find their way and go forward. Thank you very much for joining us here today for this talk. We really appreciate your time and also the fact that you brought out so many things and any fintechs who want to reach out to more customers, of course, please, you know, you can reach out to with some himself and he could give you some more ideas. You know, as we conclude this talk, we'll be bringing you five number of talks in fintech and other technology spaces that Tech Talks entrepreneur APAC, if you have more questions, please feel free to put your questions in the comment box. And we'll hopefully answer it and please like our pages and tell us how you like this episode. Thank you again for joining us with us.