Alijah Poindexter 00:06
Welcome to the Buzz, a Bank Automation News podcast. I’m associate editor Alijah Poindexter. Recently I spoke with a Anil Mahalaha, head of solutions and a founding member at open finance and API vendor Akoya, a recent addition to our Bank Automation News Emerging Fintech Directory. Akoya uses API’s to take the place of screen scraping, enabling some of the nation’s largest banks and their customers to securely share and interact with data.

Anil Mahalaha 00:30
Sure, yeah, no, I’m actually a founding employee, so to speak for Korea, and South Korea started back. Actually, back in 2018, we were part of the fidelity access API group that was turning up API’s for Fidelity Investments. And the reason we were doing that is because fidelity realized the amount of screen scraping that was going on. Screen Scraping, obviously, as you know, is based on Password, right, so end users were sending, sharing their username passwords with fintechs out there. And this was really concerning to Fidelity where you know, the fintechs had, you know, fidelity, username, password. So what we started looking into is how we can make it more secure for the customer and the customers data, right, because when the fintechs, were coming in, they will not only, for example, if they were you know, there was a payment use case that the end user goes to the FinTech for the fintechs will go into an aggregator, the aggregator was scraping much more than just the account number routing number that is needed for money movement. So fidelity, realized that and then also realize that, as we were as fidelity, going through the process of tokenizing, or sending up token servers and API’s, we realized that there was a gap in the industry, where other financial institutions were also running up against the same issues and trying to figure out the same on their own. And so therefore, you know, we got in touch with a few of them. And with the help of clearing house, back in February of 2020, acquire became an independent company, which is jointly owned by, you know, about 11 North American banks into enfidha. Plus Fidelity Investments.

Alijah Poindexter 02:14
Obviously, the the sort of space of Korea’s working in is very crowded. How does accordion make it unique? Right? Of course, you need a core, you answered a unique need. But when it comes to the client experience, what are the Korean doing? Or what does the Korean do that makes it sort of a unique differentiated experience for your client?

Anil Mahalaha 02:30
Yeah, so our clients are really the data providers, which are the banks and the data receivers, right. So those are, those are really our clients and for the, for the data providers, what we are providing is one integration and one contract for the data providers, and then give them access to or give the fintechs access to multiple data providers on the core network. So FinTech connect once and they have access to all the data providers. On the other side, the data providers only have to deal with one contract with accoya, and doesn’t have to negotiate with every data recipient. We also have the financial data exchange compatibility, so we provide the data providers, you know, compatibility with financial direction to be taken their API’s, whatever form they are. And then when we provide that data to fintechs, it’s in. It’s an FBX format. We have be hosted test environments as well. So if you’re a bank, and you’re you don’t have a lower environment made available for applications to test against a koi does that to a to a hosted test environment, we have actually have a bank that marks all the bank’s data. We call it mcomber. Bank, we have in addition to that, we have data recipient registries so directly, I should say. So the data providers can go to the directory and get information on on the vetting information that we have done on the recipients management console is another example where they can log in single sign on into the management console and manage the data that is leaving their to their API’s. We provide them the due diligence information we did on the data recipients and then we enable their customers to fulfill the consent flow to authentication. And we also provide account selection. So if the bank doesn’t want to do it, we can we can provide account selection. And it goes on actually, there’s much more we provide permission dashboard, we provide API’s to the banks that they can call to see, you know, who their end users are sharing data to. So that’s something that you provide to the data providers, and also the other side of the clients that we have as data recipients and to the data recipients. We provide permission access to the financial data, and through that we provide numerous use cases that the fintechs will want to leverage PFM Business Finance Management lending credit enhancement to multiple use cases through the API endpoints that we have the provide them balances transfers, sorry transactions investments payments, customer information. We also have for the data recipients a very neat thing. It’s the data recipient hub. So the data recipient can, can sell sign on, and all the way to production, they get on to the data recipient hub, they can see what financial institutions we are supporting, they get a library of the data fields that the each bank is providing. They also have test beds that they can test their endpoints against, we provide them API availability SLA is efficient pricing, obviously, tiered pricing is also available. And the biggest difference for the data recipients that we have is we don’t store data, right? So we are just transparently providing them data, we don’t know who the end user is via we don’t need we don’t have any data on their clients. So it makes it easy for them to, you know, to to trust a coil. So what automates So automation in terms of onboarding, right. So the the the recipients automatically onboard onto the cloud platform, they can check, check the their providers, they want to get data from that is all automated, they can test out our API endpoints to the to the mekomo Bank, as I had mentioned, and then when they are ready for production, right, then they check the the data providers they want data from and that they can start using the they can they have access to their own client ID secrets that we have automated and then they get access to the data provide the data, for the most part, without any intervention on our part,

Alijah Poindexter 06:37
you know, when the you know, the pandemic, the ensuing shift to digital across Financial Services has data or, you know, changed at all? And if it has, how have you seen it, you know, sort of modify and it sort of change over time?

Anil Mahalaha 06:50
Yeah, for sure. I mean, you’ve seen the effect of the pandemic, you know, the number of fintechs have really grown in the past couple of years, since, you know, since the beginning of 2020. And mostly around open finance, you know, this free flowing of data from the consumer financial consumer data through their financial institutions. So the proliferation of the open finance has led to unregulated entities out there that we believe that are storing a large amount of FinTech data like financial data. So new, new fintechs are storing financial data there that includes username and password. So we have seen that landscape shift and grow. And the data aggregators are or you could call them the middle layers in the financial data sharing exchange. And they they store all the customer data that they then provide to the financial institutions, and not just during the pandemic. But over the past 20 years, the aggregators have used screen scraping to get the data and the the consumer credentials, right. And then, as far as getting rid of the screen scraping and moving over to the API’s, that transition has been very slow. You know, we have seen that all along. And even though during the pandemic, and even before the pandemic, there was a US Treasury report that came out that said that the financial services company, they’re aggregators, they all agree that sharing login, login credentials constitute a high risk, right? Especially in the environment we’re in now, with some of these aggregators have more username password than the financial institutions themselves, because they’ve aggregated the username passwords, and that is all in one repository, which is, which is quite a high risk. You know, during during this this time,

Alijah Poindexter 08:39
what are some of the maybe you can give me a few best practices for a bank or larger credit union or a financial institution, if you will? What are some best practices there for maybe managing interpreting sort of doing business, for lack of a better term a with again, these massive streams of data but regulated unregulated consumer, a back end, obviously, embedded in open data sharing, becoming a part of that? What are some best practices for a bank there when it comes to, you know, kind of managing and interpreting that data?

Anil Mahalaha 09:08
The other part of my role actually, is that financial direction FTX. And I’m a co founding member of the financial data exchange, and I, co chair of a couple of committee or committee and working group out there, and one of the things that we started to look into is data clusters, and how do you manage the information? So the data cluster term is was for the end user where you tell the end user, okay V, the FinTech would tell them, we need your account information, we need your transactions, we need your input investment information. And that would be passed on to the data provider. And it makes it very succinct. For them to provide that data that is being requested by the fintech. So as opposed to, you know, looking at your entire record, keeping databases and seeing what data is required. You can now have it bite sized into the class. Certain from weather data clusters, so that helps them manage the data. And then you can combine the clusters, you can use the cluster the building block to provide data to a use case. So for example, the personal financial management use case has data clusters, it’s an account, basic as transaction use K, data cluster investment data cluster. There is other data clusters out there for for personal information. So customer data Cluster would give you data on the on the end user, which you can use for account verification, and even for money movements. So that’s one way to, you know, to get your arms around the proliferation of the of the data in the banks.

Alijah Poindexter 10:42
Maybe you can, you know, what are some emerging technologies in the sort of data space in the broader digital financial services space? What are some of the emerging technologies you’ve seen, or that you think we’ll start to see more that really excites you or really gets your interest up?

Anil Mahalaha 11:00
So for the financial data sharing space, I think, you know, we see the tokenization, we talked about early on, we see that as quite beneficial, it secures the end user are where their account number routing number is not being shared. So that we see as something emerging, the other part we see is where the financial institutions themselves could be data recipients, right? So they are providers of the data, but they’re also huge consumers of the data, where if you have a mortgage application on your bank side, you can then have the end user fill that out using data from other banks so quick and can provide the data providers on board the data providers, I should say, as data recipients. And then also, you know, new products that are coming out in the in the open finance space for new account opening for payment enablement knowledge says that there are new things that are being worked on in STX and in Korea. And lastly, I would say you know, from an acquirer point of view, or at least the API data, the data that is available to the acquirer API’s right now what 65% of DDA accounts are available to a Korea, a third of the retail brokerage accounts go to a Korea, a quarter of the defined contributions go through a Korea 60% of the credit card data issued is go through Korea. So as we grow, we will make more data available on our platform, which will help open finance and then all the innovation that is going on in this space is fed through all the data that passes through Korea.

Alijah Poindexter 12:32
Excellent. And you brought us to our to our final point, of course, we started with Sequoia, we can finish with a quarry as well. So you know, from your perspective of what’s next for Korea, where’s the core, you’re gonna go next, with their technology strategy, what kind of moves are on the horizon for accoya?

Anil Mahalaha 12:47
Yeah, so enabling more use cases is really what we’re focused on, to provide, you know, not just open banking, which is more about payments, but open open finance, enabling different use cases. Like I talked about account verification use cases, you know, money movement, use cases, other types of use cases that help the DACA recipients use the data. And then of course, committed to removing credentials out of the market, right to de risk the financial data sharing space. So that’s really what we’re focused on. We’re focused on providing tools and technologies to data providers if they don’t have API’s set up or if they don’t have or service syrup and also make it easy for the data recipients to to use accoya. Because we have FTX API’s it makes it easy for them to to to integrate with a career. And also it makes them interoperable have said if they want to go somewhere else they can they can use somebody else’s API as long as there are a few exceptions.

Alijah Poindexter 13:49
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