Bankers, fintech professionals call for open banking policy

Bankers and fintech professionals suggested introducing application programming interface (API) based open banking services so that more people can be brought under banking services through better use of technology.

They made the call in a roundtable conference organized by the Bangladesh Association of Software and Information Services (BASIS) on Wednesday.

Open and API banking, a new concept that is becoming very popular in both developed and developing countries, reduces the costs of traditional banking and increases new revenue opportunities for banks.

In the open banking system, traditional banks collaborate and share data with other banks and fintech companies so that innovative financial services can be introduced faster and cheaper.

The roundtable conference was organized by the BASIS Standing Committee on Fintech on 24 August. Senior officials from 20 leading commercial banks and over 30 fintech entrepreneurs attended the roundtable.

Bangladesh Bank Managing Director Md Khurshid Alam chaired the roundtable. Selim RF Hossain, chairman of the Association of Bankers (ABB) was the special guest.

Bankers and fintech companies urged the central bank to introduce supportive guidelines and demanded a standardization process so that banks and fintech companies can share data based on customer consent, and ensure data security and privacy.

Speakers also emphasized that all financial transaction data is owned by the customer or user. Banks or mobile financial services are only custodians of the data.

If a user wants to share the data with a third party to get financial services like loan from any other financial organization, the custodian banks should ensure that data sharing, experts said.

Three keynote speakers presented their speeches in the round table conference.

Todd Schweitzer, CEO of Brankas, the leading open banking fintech company in the Philippines and Singapore, shared best practices for open banking in the Southeast Asian region.

Jayanta K Bhowmick, a senior systems analyst at Bangladesh Bank, gave another keynote address on the topics and discussed the possible roadmap for API-based open banking in Bangladesh.

Redwan-ul Ansary, CEO of Circle Fintech, gave a presentation on the necessary policy support to enable greater partnerships between banks and fintech companies.

Chief guest of the program Khurshid Alam from Bangladesh Bank shared the central bank’s commitment to necessary policy and regulatory support for open banking in Bangladesh.

He also mentioned that the central bank will facilitate new innovation by young fintech entrepreneurs by giving them all kinds of regulatory support. He also advised banks for greater cooperation with local fintech companies.

Fahim Mashroor, Chairman of BASIS Committee on Fintech and CEO of Bdjobs.com mentioned that open banking is the best way to solve the major problem of low payout ratio between banks and the MSME segment.

“The problem of high operational costs for banks for disbursement and repayment of MSME loans can be solved by open banking digital lending,” he said.

Head of IT and Digital Banking in a number of banks including Brac Bank, UCB, HSBC, Bank Asia, Islami Bank, Mutual Trust Bank, City Bank, Jamuna, bKash, Nagad, Upay and other financial institutions attended the program and participated in discussion.

BASIS President Russel T Ahmed, Vice President Fahim Ahmed along with over 30 BASIS member companies were also present in the round table.