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Open Banking around the Globe: Australia, the U.K., and Japan



Open Banking Ecosystem in the U.K.

Open Banking presents broad opportunities for fintech across the globe, and every region has its own specifics. For today’s research, we chose three countries from different parts of the world: Australia, the U.K., and Japan. In each country, Open Banking has its own history of development. Yet, all three are ready to adopt new regulations and bridge the gap between fintech and banks. Here are the many faces of open banking in Australia, the U.K., and Japan.

Fintech Regulations around the Globe: What is Going on Right Now?

Slightly Slow yet Thoughtful Launch in Australia

Initially designed to regulate personal data handling, Open Banking regulations have evolved in Australia recently. In addition to banking data, consumers now can share info on their loans and mortgages.

The Australian Competition and Consumer Commission regulates the activities of four major banks: Nab, CommBank, ANZ, and Westpac. Also, it issues accreditations for financial companies (including fintech) that decided to adopt new regulations.

Open Banking’s massive launch should strengthen fintechs’ position against the Big Four’s dominance. Currently, the major Australian banks have roughly 95% of the market share.

Per the last ACCC’s report, only two financial companies received accreditation, and the other 39 are still getting it. Though the authorities postponed the “public rollout” of Open Banking due to privacy and security concerns, the pandemic precipitated the transition. The major Australian banks and governments have already made some progress since the outbreak.

The Australian Treasury believes that Open Banking should help individuals and SMEs recover from the pandemic’s disastrous economic impact. Better data sharing can facilitate finance management and minimize banking costs to ensure a faster recovery.

Tremendous Progress so far in the U.K.

Open Banking began its history in the U.K. in 2016. In August of that year, the Competition and Markets Authority (CMA) issued the retail banking report. The report explicitly underlined that the financial sector was ripe for innovation.

Overcomplicated fee structures and account opening procedures for Small to Mid-sized Enterprises (SMEs) were among the main causes for the need.

As a counter to these procedures, the CMA proposed a set of retaliatory measures. One of those measures was an open API banking standard for sharing consumer data.

The first pivot to the new regulations was Open Banking Implementation Entity, a non-profit group of banks, fintech, SMEs, and others. Its goal was to ensure the security of financial record-sharing. However, Open Banking’s rollout began only in January 2018, when banks acquired the actual ability to share consumer data.

From that moment, third parties with access to consumer data have been encouraging consumer payments in different ways. Some provided universal services that allowed consumers to access their accounts in several banks (if they had such). They could access banking information through a single provider or from a single app. Other providers offered automated budgeting, cheaper overdrafts, and more features.

Open Banking Ecosystem in the U.K., Source: Business Insider


Big Initiatives in Japan Lead to Big Discoveries

Japan was among the first Asian countries to establish its own Open Banking framework. In 2015, Japan’s Financial Services Agency (FSA) established a consultation desk to make payments more accessible. However, the initiative was just the premise of Open Banking.

In the next couple of years, the Bank of Japan amended the Banking Act two times. In 2017, it changed the number of ownership banks must have in fintech. Next, it released a framework for regulating e-payments. In 2018, the FSA opened the Strategic Development & Management Bureau to devise a new financial services strategy with fintech as the “driving” initiative.

Japan’s economy relies heavily on cash, with banks focusing on cashless transactions and digital payments. The demand for these payment types has grown rapidly due to the 2020 Tokyo Olympics, though the Japanese authorities postponed it.

The measures to adopt Open Banking are versatile. Yet, the most common ones are the collaboration between national and regional partners and partnerships between banks without building API portals.

A notable change happened in October 2017, when three megabanks — Mizuho, Sumitomo Mitsui, and MUFG — agreed on establishing a universal QR payment system. Another milestone was reached in May 2018, when Resona Banks, Fukuoka, and Yokohama collaborated to build a QR code payment system called “Yoka Pay.”

Despite the scope of initiatives, many Japanese banks decided to team up once they become compliant with the new regulations.

API Adoption in Japan
API Adoption in Japan, Source: Accenture


What’s Next for Open Banking Worldwide?

When Open Banking became mature in the U.K. and Japan, financial players readily adopted the system. Meanwhile, Australia is yet to go through this process.

In all the reviewed countries, the government initially led Open Banking initiatives. In the future, local banks and authorities will continue carrying out related initiatives to ensure Open Banking’s sustainable development worldwide.

Anton Lashuk

Anton is a Content Marketer highly interested in innovative technologies. He strives to explain difficult concepts in plain words to make the provided information perfectly clear to the audience.


Fintech Kennek raises $12.5M seed round to digitize lending



Google eyed for $2 billion Anthropic deal after major Amazon play

London-based fintech startup Kennek has raised $12.5 million in seed funding to expand its lending operating system.

According to an Oct. 10 report, the round was led by HV Capital and included participation from Dutch Founders Fund, AlbionVC, FFVC, Plug & Play Ventures, and Syndicate One. Kennek offers software-as-a-service tools to help non-bank lenders streamline their operations using open banking, open finance, and payments.

The platform aims to automate time-consuming manual tasks and consolidate fragmented data to simplify lending. Xavier De Pauw, founder of Kennek said:

“Until kennek, lenders had to devote countless hours to menial operational tasks and deal with jumbled and hard-coded data – which makes every other part of lending a headache. As former lenders ourselves, we lived and breathed these frustrations, and built kennek to make them a thing of the past.”

The company said the latest funding round was oversubscribed and closed quickly despite the challenging fundraising environment. The new capital will be used to expand Kennek’s engineering team and strengthen its market position in the UK while exploring expansion into other European markets. Barbod Namini, Partner at lead investor HV Capital, commented on the investment:

“Kennek has developed an ambitious and genuinely unique proposition which we think can be the foundation of the entire alternative lending space. […] It is a complicated market and a solution that brings together all information and stakeholders onto a single platform is highly compelling for both lenders & the ecosystem as a whole.”

The fintech lending space has grown rapidly in recent years, but many lenders still rely on legacy systems and manual processes that limit efficiency and scalability. Kennek aims to leverage open banking and data integration to provide lenders with a more streamlined, automated lending experience.

The seed funding will allow the London-based startup to continue developing its platform and expanding its team to meet demand from non-bank lenders looking to digitize operations. Kennek’s focus on the UK and Europe also comes amid rising adoption of open banking and open finance in the regions.

Featured Image Credit: Photo from; Thank you!

Radek Zielinski

Radek Zielinski is an experienced technology and financial journalist with a passion for cybersecurity and futurology.

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Fortune 500’s race for generative AI breakthroughs



Deanna Ritchie

As excitement around generative AI grows, Fortune 500 companies, including Goldman Sachs, are carefully examining the possible applications of this technology. A recent survey of U.S. executives indicated that 60% believe generative AI will substantially impact their businesses in the long term. However, they anticipate a one to two-year timeframe before implementing their initial solutions. This optimism stems from the potential of generative AI to revolutionize various aspects of businesses, from enhancing customer experiences to optimizing internal processes. In the short term, companies will likely focus on pilot projects and experimentation, gradually integrating generative AI into their operations as they witness its positive influence on efficiency and profitability.

Goldman Sachs’ Cautious Approach to Implementing Generative AI

In a recent interview, Goldman Sachs CIO Marco Argenti revealed that the firm has not yet implemented any generative AI use cases. Instead, the company focuses on experimentation and setting high standards before adopting the technology. Argenti recognized the desire for outcomes in areas like developer and operational efficiency but emphasized ensuring precision before putting experimental AI use cases into production.

According to Argenti, striking the right balance between driving innovation and maintaining accuracy is crucial for successfully integrating generative AI within the firm. Goldman Sachs intends to continue exploring this emerging technology’s potential benefits and applications while diligently assessing risks to ensure it meets the company’s stringent quality standards.

One possible application for Goldman Sachs is in software development, where the company has observed a 20-40% productivity increase during its trials. The goal is for 1,000 developers to utilize generative AI tools by year’s end. However, Argenti emphasized that a well-defined expectation of return on investment is necessary before fully integrating generative AI into production.

To achieve this, the company plans to implement a systematic and strategic approach to adopting generative AI, ensuring that it complements and enhances the skills of its developers. Additionally, Goldman Sachs intends to evaluate the long-term impact of generative AI on their software development processes and the overall quality of the applications being developed.

Goldman Sachs’ approach to AI implementation goes beyond merely executing models. The firm has created a platform encompassing technical, legal, and compliance assessments to filter out improper content and keep track of all interactions. This comprehensive system ensures seamless integration of artificial intelligence in operations while adhering to regulatory standards and maintaining client confidentiality. Moreover, the platform continuously improves and adapts its algorithms, allowing Goldman Sachs to stay at the forefront of technology and offer its clients the most efficient and secure services.

Featured Image Credit: Photo by Google DeepMind; Pexels; Thank you!

Deanna Ritchie

Managing Editor at ReadWrite

Deanna is the Managing Editor at ReadWrite. Previously she worked as the Editor in Chief for Startup Grind and has over 20+ years of experience in content management and content development.

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UK seizes web3 opportunity simplifying crypto regulations



Deanna Ritchie

As Web3 companies increasingly consider leaving the United States due to regulatory ambiguity, the United Kingdom must simplify its cryptocurrency regulations to attract these businesses. The conservative think tank Policy Exchange recently released a report detailing ten suggestions for improving Web3 regulation in the country. Among the recommendations are reducing liability for token holders in decentralized autonomous organizations (DAOs) and encouraging the Financial Conduct Authority (FCA) to adopt alternative Know Your Customer (KYC) methodologies, such as digital identities and blockchain analytics tools. These suggestions aim to position the UK as a hub for Web3 innovation and attract blockchain-based businesses looking for a more conducive regulatory environment.

Streamlining Cryptocurrency Regulations for Innovation

To make it easier for emerging Web3 companies to navigate existing legal frameworks and contribute to the UK’s digital economy growth, the government must streamline cryptocurrency regulations and adopt forward-looking approaches. By making the regulatory landscape clear and straightforward, the UK can create an environment that fosters innovation, growth, and competitiveness in the global fintech industry.

The Policy Exchange report also recommends not weakening self-hosted wallets or treating proof-of-stake (PoS) services as financial services. This approach aims to protect the fundamental principles of decentralization and user autonomy while strongly emphasizing security and regulatory compliance. By doing so, the UK can nurture an environment that encourages innovation and the continued growth of blockchain technology.

Despite recent strict measures by UK authorities, such as His Majesty’s Treasury and the FCA, toward the digital assets sector, the proposed changes in the Policy Exchange report strive to make the UK a more attractive location for Web3 enterprises. By adopting these suggestions, the UK can demonstrate its commitment to fostering innovation in the rapidly evolving blockchain and cryptocurrency industries while ensuring a robust and transparent regulatory environment.

The ongoing uncertainty surrounding cryptocurrency regulations in various countries has prompted Web3 companies to explore alternative jurisdictions with more precise legal frameworks. As the United States grapples with regulatory ambiguity, the United Kingdom can position itself as a hub for Web3 innovation by simplifying and streamlining its cryptocurrency regulations.

Featured Image Credit: Photo by Jonathan Borba; Pexels; Thank you!

Deanna Ritchie

Managing Editor at ReadWrite

Deanna is the Managing Editor at ReadWrite. Previously she worked as the Editor in Chief for Startup Grind and has over 20+ years of experience in content management and content development.

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