Banking API innovation from emerging and frontier markets


Two big themes on Daily Fintech are:

  • First the Rest, then the West (the idea that innovation in the 20th century flowed from the West (America and Europe) to the Rest (Of the World, aka ROW, emerging, developing, frontier, high growth) and in the 21st century that flow of innovation is reversing as the Rest leapfrog old technology and innovate out of necessity (which as always is the mother of invention).
  • Rebundling innovation enabled by APIs that abstract utility layer services so that entrepreneurs can just pay for that on a transactional basis without writing a lot of new code.

In this post we bring those two themes together.

Yodlee in South Africa

Thanks to @Vincent Van Dugteren from Netherlands for the heads up (on this thread) on what Yodlee is doing in South Africa as reported by VentureBurn.

Yodlee was into Banking APIs before they were famous. They were an early Fintech IPO and got taken private by Envestnet for $590m.

Yodlee built a partnership with an API marketplace in South Africa called Limitless Technology (which is the company behind South Africa’s first Personal Financial Management tool called Moneysmart. PFM relies on Open APIs from Banks.

Limitless uses a RESTful API (which is pretty mich de facto these days).

If you want to sell a PFM, it is smart to do it in emerging/frontier markets such as Africa where a new middle class is emerging that needs to “watch every penny” and where these tools are relatively new. In contrast, in the the West, these kinds of tools have been around for a while (Mint was founded in 2006). A modern PFM in the Rest will be fully optimised for mobile and the web browser version may hardly get used.

Singapore and India

We have often written about the Fintech innovation coming out of India (most recently here). Singapore has deep cultural and business ties to India, so it is natural for a delegation from Monetary Authority of Singapore (MAS) to spend time there focussing on enabling that innovation as we can see from this Event. Thanks @ericforgy from Hong Kong for the heads up (on this thread) He was able to watch this on a live stream (which for some reason I cannot view in Switzerland) and quoted Roy Teo from MAS making statements along these lines:

“1. Some banks will not survive the FinTech disruptions. Those who do not embrace APIs will die.

2. MAS is asking banks for a list of their APIs on a regular basis (implicitly encouraging them to build APIs).

◦ I’ve asked if the list is public with no response yet. Please let us know if you get your     hands on the list.

3. MAS itself is developing APIs that will be used for regulatory reporting purposes to simplify the process. Again, encouraging banks to use APIs.”

Tech Smart Regulation

It is fascinating to see a regulator such as MAS taking the lead on these kind of initiatives. We see this kind of “tech smart regulation” in Europe in the form of PSD2. It maybe even more advanced in Asia where “lite banking regulation” came in the form of Payment Bank Licenses and where mobile wallet interoperability is partly enabled by regulation.

If you want to see the future of Fintech, it pays to head to Asia.

Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech & operates the Fintech Genome P2P Knowledge Network. Bernard Lunn is a Fintech thought-leader.

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