Issue 1: Risk Management

Mitigating risks with Open Banking

Interview

Aryza CEO Colin Brown talks about the future of receivables management

Colin Brown

“Open Banking is the future – I have no doubt”

In this interview, Aryza CEO Colin Brown talks about current market trends such as Open Banking, “mobile first” and Big Data, and why dealing fairly with customers is increasingly important, also from an ESG perspective.

Colin, this magazine looks at the topic of “risk” from different points of view. What approaches are particularly important in these difficult times to deal properly with the growing risks?

We are currently living in incomparable times. We transitioned from Covid straight into the war in Ukraine which has undoubtedly made a global impact. Inflation, rising interest rates and skyrocketing energy costs have made the markets more volatile. In these times, it is more important to understand your clients in the best possible way and to accompany them closely. Open data and automation are important keywords to implement this.

Aryza is a pioneer when it comes to products that use open banking data. Other countries are more cautious. How can we succeed in implementing this technology globally?

I think the acceptance of open banking and open finance is increasing day by day as part of an evolution. The citizens in the UK are at the spearhead here and are among the early adopters, and even then the topic is still in its infancy. Right behind the UK, by the way, comes Brazil. It is important that our products are ready for markets in all locations, so we can start with the best possible products when the demand is there.

Is Open Data also a generational issue?

Certainly, young people are used to sharing everything: their location, their pictures, their daily routines – from there, it’s not a big step to make your own bank statement available. This group also trusts mobile devices much more than older generations do. I have no doubt that open data is the future.

Another aspect is the increasing relevance of a personalised approach?

Absolutely, financial advice is a very personal business. An accurate understanding of the client’s financial situation based on an assessment is essential. This is where Aryza platforms come in, offering clients tailored financial advice based on open data integration – such as income, expenses, or other assets. This ranges from purely financial advice, to credit management, to debt management solutions. The focus is always on affordability for each client within a clearly defined user journey.

Where does the market stand?

In our experience many large companies are looking to replace their call centre activities with automation and self-service portals. This use of technology offers a clear time and cost advantage, as staffing requirements are significantly lower. Using open data, such as open banking, information from Credit Bureau searches, property valuation lookups or car valuation lookups, our technology can create an accurate financial profile within 2-3 minutes. Using the right algorithms and decision engines, we can then offer the customer a product or a specific payment plan that is affordable.

How accurate can automated financial profiles be? Can we quantify that?

Two years ago, the accuracy was extremely high and it’s improving all the time by using more available data sources and the application of artificial intelligence. In my view, we are meeting the needs of the market of the future. I read an article that suggested that 64% of CEOs from the financial services sector now state that they need to significantly improve their customer understanding through data and analysis.

The financial market is highly regulated, how does this affect Aryza’s international business?

It has been our core business for over 20 years to provide software solutions to our clients in highly regulated markets. While regulatory requirements and legislation differ between countries, there are commonalities. In all banks and corporates, it is important to ensure the highest possible level of transparency and compliance and to enable quick audits. At Aryza, we have always taken this need into account when building our software solutions. This includes updating regulatory changes in the software in a timely manner. Our advantage is certainly that we have a deep-rooted understanding of the sectors in which we operate.

ESG requires companies to take responsibility for environmental, social and governance issues. What is Aryza doing in this area?

ESG principles are already reflected in our mission statement (“We continue to come to work every day to find new ways to help our customers improve the financial health of more people and businesses all over the world”). Our goal is to guide our clients’ customers through the credit and debt lifecycle as quickly, efficiently and fairly as possible. This is optimally done within the framework of a seamless customer journey. Using technology to protect vulnerable customers, and those that may be struggling financially is essential.

Aryza aims to be carbon neutral by the end of 2023. To achieve this, we’re getting the right team together to plan our roadmap.

Current global crises are creating challenges for all sectors. What is the major impact on banking?

One major challenge is certainly the many regulations and the increasing complexity that comes with them. An example is the forbearance imposed during the Covid crisis. Measures like these are required to be implemented quickly and this is a real challenge for many businesses. Another issue is the rapid advance of technology. The bigger the business, the bigger the challenge. For the average financial institution, 85% of the technology spend goes into maintaining legacy systems. It is often difficult for large businesses to keep up.

What is Aryza Recover

Aryza Recover is a powerful tool for automating payment plans and collection strategies. A simple user interface for consumers that helps you gain a clear understanding of their income, outgoings, credit commitments, ongoing affordability and vulnerability, without the need for contact centre agents.

Find out more

What are the advantages of fintechs and neobanks?

How can we as Aryza help banks keep up?

It’s very difficult to completely rip up and rebuild the backend of a large bank. What we can do is provide on-point solutions that can be fully integrated into the core banking system and work as a stand-alone solution. Shawbrook Bank, for example, works with an Aryza platform to underwrite SME loans for their B2B clients. They use it as a companion solution to their existing loan origination software to gather data faster using Open Banking and Open Finance, in turn enabling them to make faster and more detailed decisions.

What do you see as the most important trends in the coming years?

The processing of large amounts of data at great speed. A big turning point in this direction, in my view, was the Covid pandemic. There is a general acceptance from CEOs that all the recent global crises have accelerated digitalisation across the value chain. They have also shown that companies need a digital presence to survive at all. I think that the process of digital collaboration will pick up speed in the next 5 years. And as I said before, the use of apps on mobile services and their performance will become massively more relevant.

Risk management for SMEs

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