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Open finance transformation trends, iKala helps the finance industry create new business opportunities with cloud and AI

Open APIs, three pure online banks obtaining licenses, and cloud migration policies for the finance industry welcome the new era of open finance. As the finance industry is transforming, they must actively embrace AI, transform to the cloud, make good use of API management tools, and develop smart marketing technologies in order to respond to the new changes of the future.

In the “Finance Cross-Industry Technology – Cloud AI Business Opportunity Breakfast” jointly hosted by CommonWealth Magazine and iKala on October 31, Sega Cheng, CEO of iKala, Paul Liu, chairperson of PwC Taiwan, Alex Lin, CEO of RawStone, James Tien, corporate account manager of Google Cloud, Frank Gong, cofounder and chief technology officer of iKala, Chen Li-hsin, deputy general manager of Xinyi Realty’s digital smart center, and Chen Yi-shan, deputy chief editor of CommonWealth Magazine, jointly shared new cross-industry business opportunities for the cloud and AI in finance and technology.

Sega Cheng, CEO of iKala, said: “The internet era did bring changes indeed, but it was not subversion – rather, it was creation!” Last year, the finance industry invested US$25 billion and internet companies invested US$37 billion to create financial services, showing that both the finance and technology industries are moving towards open banking to create new business models and expand their ecosystems. This is a major trend toward welcoming open finance. Meanwhile, the financial industry requires technical support during the transformation in order to develop more applications.

Sega Cheng, CEO of iKala, said: “The internet era did bring changes indeed, but it was not subversion – rather, it was creation!”

Digital transformation that combines the cloud and AI to enhance the experience of digital life

Sega Cheng further indicated that iKala, which laid its foundation with AI and machine learning as its core, has already served over 300 clients, and is actively creating a “DAA flywheel” with the three major aspects: digitalization, data analytics, and applications.

Frank Gong, cofounder and chief technology officer of iKala, further explained that “digitalization” focuses on migrating data to the cloud and open banking, and uses the insights into data of Google Cloud, big data and machine learning to activate the data. The API management platform Apigee is also promoted to help enterprises quickly launch products and services such as the transaction and business data of various financial products, the conversation records of financial consultants/customer service, and the customer purchase forecast. “Data analytics” has machine learning as its core, such as smart grouping of credit cards, dynamic 360-degree unified views of customers, and “Application” focuses on smart marketing technologies, using data analysis to identify high-value customers and activate the customers, such as performance advertisement, differentiated marketing for members, insight on potential loan opportunities, smart API security protection, and Apigee Sense automated risk control.

Will the finance industry be replaced by the technology industry? The 2017 World Economic Forum listed six major changes that will be brought by financial technology (FinTech), the first being digital banks. The idea that Alex Lin, CEO of RawStone, has once open banking has become available in the future is: “The finance industry will technologically output financial services in the future, while our life scenarios can also accept it technologically.” The financial industry will no longer simply be divided into the three major blocks of banking industry, securities industry and insurance industry – it will become “financial scenarios” to support our future lives from our life scenarios such as birth, old age, sickness, death, education and entertainment.

The idea that Alex Lin, CEO of RawStone, has once open banking has become available in the future is: “The finance industry will technologically output financial services in the future, while our life scenarios can also accept it technologically.”

Lin used the Sweden’s BankID as an example. A bank and a mobile phone manufacturer had a joint venture in 2003, and established an electronic certificate. When users used the new platform, they no longer needed to manage multiple sets of accounts and passwords, and ID authentication was more convenient; people’s acceptance of technical financial services increased significantly. In addition, mobile payment must be able to cross borders in the future; scenarios where services are obtained offline in life while payments for purchases are made online will become more and more popular. Such a trend will expand to the operation of businesses, promotion of tourism, the quality and claims of medical treatment, and even into campus life and education scenarios. The more technological life scenarios become, the smoother the technological output of financial services will become.

Let finance walk into our lives and create API financial products

“Open APIs are the first step to let finance walk into our lives!” Frank Gong believes. “Considering APIs as a financial product can provide better usage experiences and create the digitalization of financial services.” In other words, using combinations of different types of APIs to display products for different industries and application scenarios.

Frank Gong believes “Open APIs are the first step to let finance walk into our lives!”

How can open API applications turn APIs into products? Frank Gong indicated that by connecting the cross-cloud API management platform Apigee with Dialogflow, consumers only have to say “I want to go to Japan” and use voice instructions to let the system help plan travel itineraries; plane tickets, accommodations, transportation shuttles and even subway tickets can be integrated into the itineraries to achieve one-stop purchase. Open APIs can collect the external data of customers, including information on hotel reservations and locations to visit, allowing unlimited possibilities for product applications.

Frank Gong also shared how the Google Cloud Platform (GCP) helped Bank BRI transform into FinTech. Customers download the App and then scan their IDs, and they can get their credit scores within seconds. If, after facial recognition, it was confirmed that they can receive digital loans, the customers will be able to receive the funds immediately. The Apigee developer portal allows the connection time to be reduced from 6 months to 1 hour, and it successfully helped Bank BRI promote microfinances, creating an additional US$50 million in revenue.

Digital transformation to the cloud, Google Cloud helps the finance industry to innovate quickly

James Tien, Google Cloud’s corporate account manager, made the analysis that the finance industry faces three major challenges: the first is that the habits of customers change continuously; the second is that financial laws and regulations and GDRP compliance have made the information security regulations even more rigorous, and the existing IT framework does not allow the banking industry to innovate as significantly as the FinTech industry; thirdly, the implementation of new technology is very difficult, and AI experts are difficult to find. It is recommended for the banking industry to stand on the shoulders of giants and apply Google Cloud technology in their own scopes of business.

James Tien, Google Cloud corporate account manager, recommends the banking industry to stand on the shoulder of giants on their path to innovation.

Paul Liu, chairperson of PwC Taiwan, reminded that the cloud will allow the cost benefits of the finance industry to increase significantly, and the finance industry should consider whether backup systems can bear the crises of system interruptions at all times; he also recommended placing backup systems in the cloud.

Chen Li-hsin, deputy general manager of Xinyi Realty’s digital smart center, stated that Xinyi Realty has reconstructed their architecture to build the long road of digitalization. They centralized their hosts that were originally scattered all over the place onto Google Cloud as Google Cloud has an IDC in the Changhua Coastal Industrial Park; its speed is fast, its architecture is new and its resource setting is flexible.

During the process of using Google Cloud services and switching clouds, with the help of the cloud education and training and infrastructure manual from iKala Cloud, Xinyi Realty quickly solved technical issues, reduced the construction time by two-thirds compared to the originally estimated time, and reduced the labor power and time required for IT operation, maintenance and management. In addition, Xinyi Realty also lowered their cloud costs because the cost for Google Cloud was only a third of the cost of the old architecture.

Chen Li-hsin, deputy general manager of Xinyi Realty’s digital smart center

In September of this year, the laws for the finance industry to migrate to the cloud had just been passed. How can Google help supervise the finance industry? James Tien shared that Google Cloud has big policy teams and information security experts internally, and they have good interactions with supervising agencies all over the world and are able to achieve the requirements of GDPR and compliance with information security laws and regulations, quickly realizing the goals of businesses.

Alex Lin, CEO of RawStone, stated that in the next 1 to 2 years after APIs are opened, financial scenario services will gradually emerge, and regulators will have fuzzy spaces for financial models in scenarios where they want to achieve benefits, such as credit rating and relaxation of operation procedures.

Focusing on customer experience and exploring how to create new applications for financial services will become the determining factor for the finance industry in the future. iKala not only is a technical partner of Google Cloud, it is also actively investing in the innovation of FinTech, such as FUCO & SOLUTION, and building an ecosystem for financial digital transformation, hoping to help the finance industry transform successfully and quickly respond to market challenges.

(This article was reproduced from CommonWealth Magazine.)

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