Finos Targets Retail Banking

The Fintech Open Source Foundation (Finos) is looking to expand its mission to bring in retail financial services providers.

Logically, the foundation will first look to expand relationships with the biggest banks on its roster, which includes Citi, Deutsche Bank, Goldman Sachs, JP Morgan, Nomura, RBC, UBS, as well as many other banks and tech companies.

“It’s been in our vision to expand beyond investment banking into retail banking and, of course, very similar problems can be solved there through open source,” said Gabriele Columbro, founder and executive director of Finos, a non-profit organization for the promotion of open source development. He was speaking on last week’s Waters Wavelength podcast and during a follow-up interview. “Our ultimate goal is to host open source or open standards collaborative efforts that solve industry-wide business challenges in the retail space.”

Finos, which currently has over 300 contributors in capital markets, has split its retail move strategy into two approaches: “inside-out” and “top-down”. In doing this, Columbro said, “We can identify opportunities where collaboration in the open can offer effective solutions across the industry, similarly to what we do for investment banking.”

An inside-out approach will start by leveraging existing technology within Finos’ member and contributor base. Columbro said that the technology from existing members might jumpstart collaboration in the retail space.

The top-down approach means that Finos will look at existing open collaborations, like open banking, or regulations like the revised Payment Services Directive (PSD2), and evaluate where open source will accelerate standardization and implementation processes.

There was a time not that long ago when the use of open-source tools was controversial, but banks have overcome those worries thanks to the ease and flexibility that these solutions can bring to an older organization. Additionally, the coronavirus pandemic has driven banks to examine open source to heal common industry pain points.

“Frankly, it’s the right time in the market. This is partly thanks to Finos,” Columbro said. “We’ve always envisioned it, but will continue to keep focus on our current collaborations with the investment banking community.”

Opportunity in APAC

Tied to those retail plans, Finos is also looking to expand its presence in the Asia-Pacific region, as retail there tends to drive tech innovation across the capital markets.

“We are actively working to expand our membership base and the type of projects that we work on to be even more appealing for the APAC region,” he says. “It makes a lot of sense for us to look into retail as we expand there,” he said.

• READ MORE: Last month WatersTechnology reported that Finos moved into the regtech space. Open Source FinReg is an initiative created by Finos that aims to bring together financial institutions, technologists, and regulators to potentially build common data standards and platforms specific to financial regulation technology. Click here to read more.

As well as the innovative startups coming out of APAC, Columbro said that the lines between incumbents and fintech are more blurred than in the US or Europe.

“We are now working very closely with the Linux Foundation, which has a very developed organization in Asia, especially in China, Korea, and Japan,” Columbro said.

In April 2020, Finos joined forces with the open source non-profit the Linux Foundation. Columbro said that the pairing provides a larger pool of resources and funding for the firm.

“This is just one more step towards what we think Finos can become—the worldwide umbrella for any type of open-source and open-standard collaboration in financial services,” Columbro said.

At the first governing board meeting under the Linux Foundation, which will take place this week, the board will discuss the topic of retail expansion.

“If we decide to move forward, our goal would be to have a major announcement on this topic around the Q4 2020 timeframe,” he said.