By: Alejandro Ríos
It is difficult to think of our financial system without online electronic funds transfers («EFT» for those in the transactional financial environment). The financial industry had to make them available by regulation in February 2008, when I had the opportunity to participate in one of the largest financial institutions in Chile to implement them in «impossible» times, a real leap in financial services that left us for several years as the only ones in the world with this solution.
Today this tool accompanies us naturally, first in the personal segment and then in the corporate segment. I cannot imagine that a prepaid card issuer or a bank would seek to differentiate itself in terms of technical quality and performance in this service, for example, by indicating that it can send a transfer in less than 2 seconds when the average I understand is little more than that (measured in hundredths of a second). The industry gained in several dimensions by taking this step together, efficiency, transactional capacity, knowledge and security among others, but most importantly, people and businesses gained. In the vicinity of this service, now considered inherent to account servicing, different value propositions have been built and will continue to be built.
We are very close to fully entering the new era of the financial system, with incredible challenges that have experts from different areas of the financial system in Chile contributing to the design of our Open Finance regulation, which will mark a turning point, threatening current models, yes, new business models, I see entertaining opportunities.
Although it is repeated over and over again, innovation and breakthroughs require a change of mindset, when it comes to people it is difficult, when it comes to institutions that harbour a culture, the task is multiplied. However, I see «green shoots» as we begin to understand that the value proposition can connect dots that were previously difficult to associate and can be built with different «Lego pieces» that will be available to build walls or castles.
Co-competition» or the concept of «friendnemy» will be uncomfortable working schemes, to which we will have to get used to. Without ceasing to compete, the actors in this community will have to find in this new paradigm the way to deploy their purposes, such as financial inclusion, simplifying processes, solving historical banking problems, or creating new solutions. They will require, in my view, creativity and sharing solutions that generate efficiencies to differentiate themselves from others.
Open finance will oblige different actors to provide services, such as initiation of payments (again our beloved EFT will play a role), provision of balances and movements, etc. On the other hand, it will require those who want to provide services to comply with, among other elements, security measures, fraud mitigants, high availability and management of the consent of each account owner for a clear purpose, which may be a better experience, to solve something that has not been solved so far or simply, to provide a service that we do not know yet and that may captivate us.
I have witnessed in Chile almost heroic stories of entrepreneurs and other financial actors who pushed for new solutions, paddling in a «river of syrup». Several succeeded or are succeeding because in the end, it was better for everyone. I hope that the new mindset that is bubbling today will allow incumbents to «let their guard down» and rethink every step based on how to cooperate by centralising services of common value for the ecosystem and how to build differentiation based on their distinctive capabilities, their unique physical or digital assets (the Superpower or Secret Ingredient, as they often talk about in the startup ecosystem).
Without forgetting that there are already actors that have already stepped up to the challenge of Open Finance through web scrapping or similar processes (dry!), I see Chile being able to take advantage of one of the few advantages that it has
to start later its full incorporation into Open Finance, learn from those other countries and continents that have already started the journey and stand out for engendering what could be our new «EFT»