Page 42 - FintechAtlas2019

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Russia
Open Banking is a win-win strategy for the financial market and customers
Tatyana Zharkova, Chief Executive Officer of the Russian Fintech Association, speaks about Open Banking as a rather new concept in Russia which only gained media attention a couple of years ago. However, it is a reality for those European countries whose banks are obliged to provide access to the banking and personal data of their customers, as well as to payment services.
Could you please comment on the ultimate goals of the implementation of Open Banking in Russia? Who needs Open Banking, what approach have you adopted and what are the next major tasks for 2020 in this area? Zharkova: The primary goals of Open Banking in Russia are to improve the quality of and access to financial services and to increase competition and innovation in the market. Open Banking is truly a win-win solution for every party: banks, fintechs and customers. In order to develop an effective implementation strategy, we thoroughly examined international experience and analysed the best practices. Like the UK, the EU and Australia, we have made data security and a user- friendly experience our top priorities.
In 2020, we plan to develop and harmonise information security standards and API specifications. These include account and payment APIs and open data APIs (branch and ATM locations, interest rates, etc.). We are also launching pilot projects with banks aimed at testing all processes and methods in the real environment.
What major strategies would allow banks in Russia to prosper if you implement Open Banking in a similar way to the EU?
Zharkova: Together with our members we have developed the concept of Open APIs in Russia. This is currently being reviewed by the Central Bank of Russia (CBR). Our approach seeks to resolve data access and information security issues in a similar way to PSD2 in the EU. We believe that one should only grant access to and share personal and financial account data with the explicit consent of the customer. And authentication and communication within the Open Banking environment must be safe and secure.
It is worth noting, however, that our chief role is to develop technical standards, conduct pilot projects and stimulate innovation across the financial sector. Final decisions regarding Open Banking will be made by the regulator – the CBR.
Tatyana Zharkova, CEO of the Russian Fintech Association | Photo credit: The Russian Fintech Association
Please describe the milestone that will indicate that Open Banking in Russia is working. When do you expect this to happen?
Zharkova: Today we see Russian banks actively integrating fintech solutions. Demand for Open Banking is rising because it provides secure, standardised data exchange that helps to reduce costs and time-to-market. Hence, we are not creating a new reality but meeting the needs of the financial market. We can’t name an exact date but we can see a clear growth in market demand for Open Banking.
For example, 13 prominent banks in Russia, including Raiffeisenbank, have agreed to exchange data as part of our pilot project. This highlights the banks’ dedication to the principles of Open Banking, namely negotiation, cooperation and promoting transparency.
Speaking about Open Banking, we often hint at the partnership opportunities that will result when third party providers offer some financial services. What types of partnerships do you consider most promising for banks and customers in Russia both within the financial sector and with other industries?
Zharkova: Open Banking is a vision rather than just a narrow concept. We believe that it should contribute to
the development of an open and transparent society that benefits from cooperation and seamless data exchange. The implementation of Open APIs certainly has great potential to create cross-industry partnerships and drive cross-industry innovation.
In Australia, for example, the Consumer Data Right (CDR) will first be applied to the banking sector but then extended to the energy and telecommunications sectors. In the UK,
the Financial Conduct Authority (FCA) is exploring the opportunities arising from Open Finance. It is believed that Open Finance would extend Open Banking principles to give consumers and businesses more control over a wider range of their financial data (savings, consumer credit, investments, pensions, etc.). In Russia, we consider Open Banking to have vast cross-industry potential. Eventually, Open APIs could serve as a universal link for the whole digital economy.