Fintech Feature – Akoni
Akoni helps individuals and businesses easily manage their cash through a savings dashboard, providing easy and fast access to rates across all their highly rated banks. The range of choices on offer means customers could be earning more interest on their cash across multiple FSCS protected bank deposits.
We spoke to Panos Savvas, CTO and Founder of Akoni to find out more about this exciting fintech focused on revolutionising the Savings landscape.
As the CTO, what’s at the top of your agenda at the moment?
The interesting area for me is the recognition that Data and Technology are critical to all businesses success within the Financial Services eco-system. The focus used to be on providing a basic product to customers, but now it’s all about using data and technology to make the product as relevant as possible to customers.
The products within financial services used to be very homogenous, but we’re now seeing differentiation with the arrival of smaller fintechs. Open Banking reduces the reliance which a customer used to have on a single solution. Now, you can go to one provider for part of your solution and another provider for a different element.
In the past, technological breakthroughs have occurred when certain technologies converge. For example, the modern mobile phone was enabled through the intersection of mobile networks, smart interfaces, and cloud services. Financial technology is at a similar juncture with the standardisation of APIs, trust and identity becoming more commonplace and data science encouraging innovation. This all enables new, more innovative solutions for customers along with a move away from the single platform or single bank experience
Are any of the incumbent banks playing the role of a single user experience, layering on providers and providing that single distribution channel?
Many of the current providers have marketplaces. However, these marketplaces are so full of solutions that it can sometimes be difficult to see the wood for the trees. It’s become a marketing game with marketplaces being treated as advertising space to win new customers.
The future will be a more curated single user experience, with choice between providers being less visible. This will remove the analysis paralysis which users currently face in the existing marketplaces. The distribution channel will be able to use data to figure out the who the best service providers are for their customers. The customers won’t even need to consider it, all the underlying providers will be automatically trusted because they’re part of the same trust framework.
Can Open Finance provide a win-win-win for customers, fintechs and incumbent banks?
Yes! If the incumbent banks can create a scenario and a solution which allows them to integrate with many different elements of the ecosystem; then they’re going to be able to maximise their potential benefit as it’s going to be more appealing and beneficial for customers.
There are aspects of the overall experience which just won’t be profitable for a large bank to provide solutions for. However, they still have to offer something because the modern customer expects a personalised and tailored experience. This enables smaller fintechs (like Akoni) to offer a high value, relatively niche offering, and partner with the incumbent banks to leverage their networks and customers.
The challenge is that the large incumbents can feel threatened by this and aim to ringfence their clients because they’re worried about losing market share. The sooner they realise that partnerships are the way forward rather than isolationism, then the sooner it will be a triple win for all parties!
Do you think that’s possible without formal regulation forcing compliance?
I do, regulation forces industries to get in line by forcing willing and unwilling participants to comply. These unwilling participants will comply but with a less than exceptional service offering. Trying to set a regulatory standard can be extremely tough to get right which can lead to a complex and overly bureaucratic environment. Regulation won’t lead to an optimal result and is unlikely to lead to the best result for the customer.
In general, the US is quite free and market driven, whilst Europe has traditionally been more regulatory driven. Right now, some of the biggest aggregators within financial services have come from the US and they haven’t appeared due to regulation. As an example, Plaid didn’t start up due to a regulatory need, they saw an opportunity and created a solution for the market. I’m hopeful that other participants in the market will move for the greater good rather than waiting for the stick that is regulation.
What do you think the most exciting thing to potentially come out of Open Finance could be?
The thing that excites me the most is the idea of distributed trust. Akoni provides the cash solution, however, because we are effectively moving funds between different bank providers, we need to have a thorough view of AML and KYC reviews which have taken place. This is probably the single item that’s holding businesses which provide regulated services back from cooperating.
If the banks, alongside the regulator, and with other financial providers, can find a way to create a network for distributed trust then this can really create a springboard for Open Finance solutions. As an example: if a customer asks to move funds via the Akoni platform but is certified to us as a trusted Barclays customer (for example), then we won’t have to rerun KYC or AML checks. The trust can be passed between various providers which will make for a more seamless customer experience and will enable wider collaboration.
Akoni has found a relative niche in the Open Finance space by providing a cash platform offering services for a wide range of savers including individuals, small businesses, trusts and charities.
They can provide services such as fixed term saving accounts and fixed term bonds to customers: reducing search times and making the process of moving their cash as seamless as possible.
If the problem of distributed trust can be overcome, then Akoni will have an extremely powerful proposition to seamlessly slot into any aggregator solution. Offering the ability for a customer to easily switch their funds between saving solutions, at the touch of a button, is one of the primary benefits of Open Finance.
Akoni are clearly at the forefront of the thinking and activity in this area and I’m really excited to see how they progress in the coming years!