Banks, fintechs urged to make banking more inclusive

Experts at a roundtable recommended the introduction of Application Programming Interface (API)-based open banking so that more people have access to banking services.

At a roundtable, organised by the Bangladesh Association of Software and Information Services (BASIS) Standing Committee on Fintech on Wednesday, speakers said open and API banking is a new concept which is getting very popular in both developed and developing countries.

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. Cheaper than traditional banking, it can introduce new revenue opportunities for banks.

Senior officials of 20 leading commercial banks and over 30 fintech entrepreneurs attended the programme, which was chaired by Bangladesh Bank Executive Director Md Khurshid Alam.

Bankers and fintech companies urged the central bank to introduce supportive guidelines and a standardisation process so that such companies can share data based on customer consent, while ensuring data privacy and security.

The session emphasised that any financial transaction data is owned by the customer or user. Banks or mobile financial services only act as the custodian of that data.

If any user wants to share the data to any third party to get any financial services like loans from any other financial organisation, the custodian banks should make provision for that data sharing.

Three speakers presented keynotes in the roundtable.

Todd Schweitzer, co-founder and CEO at Brankas, a leading open banking fintech company in Philippines and Singapore, shared best practices of open banking in the Southeast Asian region. Jayanta Bhoumic, deputy director of Payment Service Department of Bangladesh Bank, gave another keynote on the topics and discussed the possible roadmap of API based open banking in Bangladesh.

Redwan Ansary, CEO of Circle Fintech, gave a presentation on the required policy support for enabling greater partnership between banks and fintech companies.

Chief Guest of the programme Md Khurshid Alam of Bangladesh Bank shared the regulator’s commitment for required policies and regulatory supports for open banking in Bangladesh.

“The central bank will facilitate new innovation by young fintech entrepreneurs by giving them all kinds of regulatory support,” Khurshid Alam said. He also advised banks to ensure greater collaboration with local fintech companies.

Fahim Mashroor, chairman of the BASIS Committee on Fintech and CEO of Bdjobs.com, said, “Open banking is the best way to solve the big problem of low loan disbursement ratio of banks to the MSME segment.

“The problem of high operational cost for banks for MSME loan disbursement, and repayment can be solved by open banking based digital lending.”

Heads of IT and digital banking departments of 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 programme and discussed various topics.

Selim Hossain, chairman of the Association of Bankers (ABB), BASIS President Russel T Ahmed, Vice President Fahim Ahmed, and senior officials of over 30 BASIS member companies were also present at the event.