Founder: What is open banking, open finance and open data, and how it will change the world | Huw Davies, Co-founder and Chief Commercial Officer at Ozone API

Monica Millares: [: 00:00:00

Huw Davies (Ozone API): Hey, Monica. Yeah, all good. Thank you. And it's yeah, it's nice to see you again after well, after so many, many years.

Monica Millares: I know it's been like, Time flies. Let's not even count how many years, but it's like time flies.

So, well, I really appreciate your time and wisdom. Like we've worked together and basically I know your style. And I was like, Oh, that's why we also want to have you because like, I know you're right. But not everybody does. gritties of who you are and what you do, can you explain to us like what has been the role of purpose?

In your life and in the business.

large parts of my life, and [: 00:01:00

And it was, it was being with people. That I really liked and got energized by. So I always kind of got motivated by being part of great teams and doing things that were interesting. I kind of only realized this later on in my career when I look back and it's like, Oh, that's, that's the theme. So I, I bounced around and ended up kind of creating a bit of a niche.

nergized me and doing really [: 00:02:00

I've got like grown up kids and things like that. And you do think a lot more. So the business now, I think we're very thoughtful about purpose. And. It is about trying to kind of leverage technology to have a really positive impact on society and economies and solve hard problems. I mean, we can only play a small part, there's a really clear purpose.

And it's the first time in my life I've ever had a kind of a, a job where it is very purpose driven before it was more about actually. Being with great people and doing things that were fun, and even outside of work, it's always been the same thing. It's kind of being with people that give me energy.

ou loved was like people who [: 00:03:00

Huw Davies (Ozone API): That's right. So it wasn't. And I was thinking about it. Purpose is all about some great big sort of need to do well for the world and, and kind of now we're working sort of in that direction. But yeah, for a lot of my life, it was more about do things that just excite me and inspire me. And that was about.

Being with great people and doing with things, doing things that were really, really interesting. And maybe if you call that purpose, then yeah, that was, that that's been it. Yeah.

Monica Millares: Yeah. But I like that because like some people, I feel some people are like, especially, I don't know, I mean, like Nelson Yates said, it's like, Oh, purpose, purpose, purpose.

r everyone? And you're like. [: 00:04:00

Huw Davies (Ozone API): But as part of that, you're kind of, so one thing I've always really...

Like enjoyed is one of the best feelings is if you build, build, you're building teams and you're working with teams and everyone feels a bit better as a, as a result of being part of that team you all making each other better, you're inspiring people. That's a great feeling. I guess that's purpose.

You're having a positive impact on, on, on those around you. So yeah, they're probably, there's probably far more purpose in it than I've ever, I've ever considered.

Monica Millares: I like that, yes, because it's like working with people, it's, yeah, it has impact when everyone around you, it's like having a good, it's just like work is like what we do all day.

Right. I

influences your kind of well [: 00:05:00

When it's going badly, yeah, it's a complete counter. So yeah, now we're having this conversation, I'm feeling much more purposeful. Yes, yes.

Monica Millares: Good, good, good, good. Okay. We've gone like seven minutes into what's purpose or not purpose. Can you tell us about like you and it's like, what does Ozone API and you do?

is implementation entity the [: 00:06:00

I was part of that and led the development of the ecosystem. And that's where I met Chris and Freddie, the other two co founders of Ozone API. And that's where we started our journey. And they're probably. kind of two drivers around the journey. One is I think we all had a view that this shift towards open finance and open data could be massively transformational for economies and societies and, and, and, and really drive a positive impact.

But at the same time, we were seeing firsthand how difficult the banks were finding it to do this. So a lot of the banks had invested huge amounts in digital transformation and they were building all these internal APIs and connecting systems. And the view was, well, this is just more APIs. We can do this.

do a really good job. So we [: 00:07:00

So that's what we set out to do. So we built a technology platform and we help banks and financial institutions around the world, deliver their, their open APIs to meet regulation where it exists, but also to give them the tools. So they can really turn it into a channel that works for them. And we also work with central banks and regulators to help them Deliver open banking and open finance initiatives at a country level.

Monica Millares: That is very, I guess, like broad and specific at the same time. Can you expand, let's say if I'm a bank and I know you work in Brazil. So if I'm a bank, well, if I work in a bank in Brazil and I'm like, we have a mandate from the seed levels and it's like, yes, yes, yes. This open banking project, but it's just.

That line, right? It's like [: 00:08:00

Huw Davies (Ozone API): Yeah. So I mean, in a number of markets like Brazil, this is being driven by regulation in, in a number of markets it's happening anyway. Without regulation, but but take Brazil as an example. Yeah, the, the central bank had a really clear vision. They defined a set of regulations in a framework and all of the banks are having to implement open banking.

open to the outside world, a [: 00:09:00

Traditionally, the banking model is very much a sort of vertical supply chain where the banks own all of the channels. If you go into a bank branch, it's the bank's branch. The bank's mobile app is the bank's mobile app. So delivering. Open APIs that others can connect to and build on top of is a, is a real departure from the traditional model of kind of being a real closed vault or walled garden or, or, or whatever you want to say and it brings some real complexity.

So, so what banks have to do, they have to implement these APIs and usually. They have to meet regulation. They might have to be in line with specific standards and security protocols. There's a huge amount of complexity. So they've got to expose these APIs that meet the standards, meet the regulations.

all of this consent between [: 00:10:00

So what we do is we effectively bring all that in a box. We built a thin, but very specialist technology layer that can sit on top of any banking technology stack and take away all of the hard bits. So the bank just exposes kind of, here's an API that. Does the kind of provides the information in, in our core banking platform, and we just plug on top and do all of the hard stuff and help them deliver their, their open APIs.

And we're doing that with banks and financial institutions all around the world.

Monica Millares: Yes, I loved how you explained that because it's kind of like the simplest explanation in internet right now. Like it is, it is like, because I think the term, and I'll, I'll ask that next, that it's like the term open APIs.

if you're not working in an [: 00:11:00

It was very closed. And now by definition, we're opening up the doors to work with other financial institutions. And so we need to do it with like. Specific protocols, taking into account technology risks, security, this, the other, and it can be very complex. And basically you help with that complexity. So we're like, Oh, forget about that complexity.

banking, open finance, open [: 00:12:00

Huw Davies (Ozone API): Yeah, sure. And it, I mean, there's, there's a huge amount of. Like any part of our industry, almost industries, there's a huge amount of acronyms and terminology and, and often it's unintentionally, but it's designed to confuse. Now the reality is the, the, the, the core constructs is the same. This is about as a customer I have.

Information here and my life becomes better if I can share that with this platform over here. So for example, my, my company we, we have a number of different bank accounts with different banks and we use Xero as an accounting platform. Our, our life becomes a lot better if we can get all of our financial information into, into Xero and manage all of our finances in one place.

ing landscape. That's really [: 00:13:00

bank accounts. But if, if you think about yourself as a customer, yeah, you have bank accounts, you might have credit cards, mortgage, pension, investments. To understand your total position, you want to see all of those. Now, open finance typically refers to all financial products. So in Brazil right now, open finances is, is rolling ahead and we're in the open insurance phase at the moment.

a whole load of other useful [: 00:14:00

So a broader open data economy creates sort of secure consent based access to drive value from, from, from sharing information and doing things differently. So as a, as a different example, you imagine if you were able to share your health data and health records when you're setting up a health insurance policy.

All of a sudden things become a lot easier. You're not having to list out every, every medical intervention you've ever had. Things just get easier and they get more accurate. So open data really across sort of multiple sectors and we're seeing that already in Australia with the consumer data, right? Is, is covering multiple sectors, not just banking and financial services.

ame concept, secure, consent [: 00:15:00

Monica Millares: And I love that you use these two words that it's like basically consent based and authorization of usage of my data. Because one of the, the key questions that comes to my mind as I listen, and I'm a customer.

It's like, Ooh, especially in the open data scenario, that it's like, Oh, now in the insurance, you have access to all my previous data. It's scary. Right. It's more of a, how do we bring that part of like, yes, you as a customer, you're giving. Consent to share your personal data across different parts of your life.

quote unquote scared that my [: 00:16:00

Huw Davies (Ozone API): misused. Yeah. And this is, this is such an important part of it because it has to be built.

So there's some really, really fundamental foundations of this. Cause I mean, as, as, as individuals, as consumers right now, we probably share far more about ourselves than we realize we do. We do it blindly with kind of lining up to T's and C's and cookies and all sorts of stuff. Fundamental kind of foundations of this move towards open banking and open finance, open data are a few sort of core principles.

So. Based on consent, and that needs to be very sort of fine grained and granular. So for example if I'm giving, I'm going through a mortgage application at the moment, if it makes the process much quicker and easier to give one time access to my account information. rather than send all of these statements and lists of all my income and outgoings.

Right. That [: 00:17:00

So we get all that transactional balance information and we can manage our, our business better. So really fine grained consent that the customer's in control of. They, they give the consent initially, but they can revoke the consent at any point. So consent is key, but it also needs to be built on trust.

So you need real trust that, so in this, this, this three party model, there's, there's, there's me, there's the account provider, that might be my bank, and there's the service I'm using. There needs to be really, really clear trust so that everybody knows that the other party are who they say they are.

And they have the [: 00:18:00

Access my account information, for example so you need you need the consent. You need it to be built on a platform of trust, and the regulation forms a big part of that by sort of authorizing who can play which roles. But then you need it to be built on really strong technical foundations, which means.

cebook data and, and I don't [: 00:19:00

What I can be absolutely certain of though, is in an open banking scenario. I have complete control. I don't have that anywhere else in, in, in how my data is being used. In any media platforms and all of these things.

Monica Millares: Yes. Because like, I guess like the three key points that you raised are like, there's different use cases.

One that it's like, I give you access to check my data once in the case of the mortgage application, you can look at my data once. Or I give you access, I give you consent to use my data multiple times until I say like no, I don't want to share my data anymore. And I can basically can withdraw the consent anytime and on top of that, it's like what you're worth.

all of these use cases. So, [: 00:20:00

It could be banks have invested a whole load of time validating my identity. They could help me with things like address, validation or identity validation. These are great sort of value adding services, but that's about access to information. There's then the sort of foundations around getting this consent and authorization.

To move money on my behalf. So payment initiation, that might be a one time payment. That might be an ongoing payment relationship. That might be a future payment. It might be approving a bulk set of payments for payroll. Kind of an API powered way of embedding payments in, in, in, in different journeys.

ar rules around what can and [: 00:21:00

In third party journeys in the right place at the right time. Embedded finance today is largely about specialist embedded finance players with APIs and they're competing against the banks. If banks can expose APIs that allow things like, so payment initiation is, is giving permission to do something on my behalf, make a payment.

It could also be giving permission. To take other actions on my behalf. That might be requesting a credit line. It might be creating a letter of guarantee. It could be any service you can do through a bank could be exposed through an API. And all of a sudden that allows all of the traditional banks through a great set of APIs.

to [: 00:22:00

Monica Millares: Yes. I love that, that you've raised the word embedded finance because exactly that is, that it's everywhere right now.

But it's true. It's because like open banking is enabling all this set of journeys that if I let's say a retail shop, I wouldn't be able to give you credit just like that because I'm not a bank, but I kind of. Can partner with financial institutions, whether that's a bank or a fintech, whomever is using this technology to then make the journey seamless to my customer, that it's a retail customer.

checked on, get the savings, [: 00:23:00

Oh, I need to open a bank. It's more of a, I'm out and about doing my life. And then the solution is just there for me. Yeah. Rather than me thinking about a financial product.

Huw Davies (Ozone API): Yeah. It's the, it's about right place, right time, right context. So I get back to that accounting platform. If, if all of that information's in there and it becomes really visible that there's I don't know, there's a cash crunch coming up.

Cause there's a bunch of planned. Payables, some of the invoices are coming in late, actually, if the bank's able to, with the accounting platform in bed there there's a, there's an opportunity to provide a, an additional credit line for a period of time. Well, that's so much easier than noticing the problem, going away to my bank, having a conversation coming.

So, [: 00:24:00

It becomes NetWest have done a good job of this in the UK. And I remember seeing one of the NetWest exec and he, he, he didn't pull his punches. He just said, we're having to invest in this cause this is the future of our bank. It won't be all about going into a branch or going into your bank's mobile app.

It's about making sure the products and services can be where your customer needs them in the right place at the right time. And that's about having a really good API platform. Yes.

And then I guess like you've [: 00:25:00

What was your journey? Like how did you move from just UK centric to from basically one geography to multiple geographies and what have been the regulatory challenges?

Huw Davies (Ozone API): Yeah, it's so it's a good, it's a good question and it's always much easier to sort of post event kind of paint the picture. But the reality is this, this, this sort of open banking, open finance, open data thing is happening right across the world.

It's inevitable. It's happening in many, many geographies. And there are differences. The regulation in UK looks a little bit different than the regulation right across Europe that looks a bit different than the regulation in Brazil and in Bahrain. And however, the fundamental foundations and principles are pretty similar.

he beginning. If we've built [: 00:26:00

Those needs are consistent across every market that this is happening. So what we needed to do was look at how do we become. The best and fastest at supporting all of these different standards that are emerging around the world. But also piecing together the best of what all of those standards enabled so that we can give banks and FIs the tools to do more than just comply and deliver value adding APIs that help their business.

re fortunate. We met a great [: 00:27:00

So as a technology company. We were never going to be able to put people on the ground everywhere in the world where this is happening. So core part of our strategy is to develop strategic partnerships with players who are much better position than we could ever be to, to get to market. We can bring a depth of expertise and a technology platform that, that no one else has but we can't have the reach and the influence that.

All these, all of these, these potential and current partners have. So yeah, for getting into Brazil with one, we needed the right partner. We got in very early. So we were, we were there way ahead of the regulation coming in. And we worked together with, with our partner to develop the market strategy and drive engagement around a technical proof of concept and all of this sort of stuff.

platform with our background [: 00:28:00

It doesn't change wherever you are in the world. It's just the top layer sort of market facing standards bit that changes. And for us, they're just more API sets. We've every, every sort of week, every month, we're adding more API sets on the top, but the core is the same. So that's helped us along with having kind of a partner centric go to market strategy.

That's allowed us to serve banks in a whole series of different countries whilst. As you pertain in a fairly small and capital efficient organization.

art with a capital efficient [: 00:29:00

If not, you're already profitable. That's impressive.

Huw Davies (Ozone API): We're not quite there yet. We're

Monica Millares: not quite there yet, but you're in the path.

Huw Davies (Ozone API): Yes. Yeah, we've, we've been really thoughtful about this. So, I mean, there are a few ways you can grow a startup. You can have an idea, go and get loads of investment and, and, and, and pray you're going to find revenue.

And, and there are a lot in, in our industry that have taken that approach and it really works for, for some, we started with a. A real expertise and a product that we knew was working. So the first thing we built was a reference implementation banking in the UK. And that became the market sandbox because we saw the banks were struggling.

s thin technology layer that [: 00:30:00

So. We start with a, we, we knew how to depth of expertise. We had a product that was really working and a revenue model that's based on licensed revenues, not based on some future usage. There's, there's a bit of that, but but a lot of the businesses in the open banking space are based on. So particularly on the.

The, the third party side, the consumption side, connecting to banks, APIs to power, things like payment initiation. A lot of the revenue is future promise, not current. Our business model, we're providing a technology platform that solves a real problem now and therefore generates licensed revenue. So we're able to create a model where there's kind of defined a very clear revenue and we've been pretty efficient because we've had a small number of.

Very, very [: 00:31:00

And now we've, yeah, I think now we've, I mean, this is a global market. I think we've proven the product market fit in multiple geographies and jurisdictions and supporting all these different standards. So now we're really excited about just continuing to scale as this gets ever more global.

Monica Millares: Yeah, exactly.

did they do? You have a core [: 00:32:00

Or basically the functionality to adapt to certain markets or certain use cases. And that's what the product team, well, product and tech team is going to be doing. Yeah,

Huw Davies (Ozone API): no, that's pretty much,

Monica Millares: yeah, no, that's a really, that,

Huw Davies (Ozone API): that's a really insightful kind of articulation of, of, of what we do. So yeah, there's the core.

m and value adding API sets, [: 00:33:00

But then we've got, there's, there's all of the admin portal and capabilities. So the tools that the bank needs to actually manage this channel, do their reporting to the regulator, oversee and manage the performance of the channel potentially authorize new third parties and all of this sort of stuff.

So there's the administration layer and then there's the, the developer facing platform as well, because each bank. We help them deliver a great developer experience with the right documentation and kind of how to guides and sample code. So there's, there's, there's all those API sets that continually growing, but then there's making sure that they, the end user facing, and that's.

There are already well over [: 00:34:00

I think 30 odd different versions in the UK, including all of the minor minor versions. So it's, I mean, you need, there's, there's, there's kind of power in knowledge and power in expertise. And I think that's one of the things we, we bring, we know this space better than anyone else. So we can kind of deal with all that complexity, hopefully quicker than anyone else.

So the, the product team and the product organization, it's a very engineering heavy business and we've kind of broken it up into. Yes. Callback and the infrastructure and kind of engineering around that. And then the kind of the, the admin portal, the developer portal, and all of the UX components. So, but then we have a product and we've got a great head of product that we, we brought in last year.

roadmap that we desperately [: 00:35:00

So that they, they act as a really important bridge. To understand, to translate, to prioritize, to coordinate, and that kind of constant feedback. And it's really important, I think, for that role. So, again, he's our product head, he's doing an amazing job is really hands on. Into the engineering side of the business and he's really hands on into the client face side of the business.

ally hands on in both sides, [: 00:36:00

Monica Millares: that is cool. Because he's got like both, both hats in a very strong, strong suit it seems.

Exactly. So what are your biggest challenges then when it comes to product and tech?

Huw Davies (Ozone API): So that's a really good question. So the, the biggest challenges in terms of product and tech, I think are just the amount of. and complexity. So, cause we're operating in so many different markets with so many different partners and clients and across all these different standards, there's a, there's constant change.

the last, a lot of time and [: 00:37:00

So each change. Requires less change. And that's been a sort of joint effort between kind of the CTO, the engineering team products. And it's, it's been a, it's been a big focus for the business, but also kind of growing up and going from that startup to a scale up and going through, I mean, going through all of the.

ISO certification and getting all of the policies and processes and everything robust. So there's a lot of growing up do as you start to really scale globally, which is so that the ongoing challenge though is just the amount of activity, but, but it's not just dealing with that. It's how do we become ever more efficient at dealing with it?

rket. So how do we make sure [: 00:38:00

I think we've got a very unique position, but how do we continue to stay ahead? Yes, do that in a way that doesn't involve just spending huge amounts of money. So we have a clear view of where we want to differentiate. And it's about, yeah, just make, making sure we're in the right places with the right partners and focusing our efforts on staying ahead in the areas that we want to be differentiated.

Not it. There are so many opportunities come along. It's really easy to get distracted and diverted. And I think kind of that clear focus is, is really important.

Monica Millares: It's important. Oh, Hugh, I'm loving this conversation. I think I could talk for another hour. We may need to have a part two but very conscious of time.

king and the challenges, how [: 00:39:00

So what can be, what could be the one thing? That you're like, Hey, we as an industry, or I as also know API, if we were to do this, the industry could be better.

Huw Davies (Ozone API): Yeah. And it's almost kind of full circle back to the whole purpose question. So so I, I genuinely believe this shift towards open banking, open finance, open data can have a dramatically positive effect on society and economies.

the data barriers and all of [: 00:40:00

So, but also I think. I mean, we're seeing some central banks and regulators viewing open finance as a central pillar of societal transformation, the the the, the, the government and the authorities in Saudi Arabia have a really ambitious vision for 2030. To transform society in the economy and open finance is a really important part of that.

It's a driver of economic growth. It's a driver of wealth creation. It's something that can remove barriers and unlock challenges around financial inclusion. So what we want to do is we, we want to accelerate and enable that and see all of those good things happening. We're kind of at the foundational infrastructure layer but that's the end outcome.

have a, a similar vision and [: 00:41:00

So that's sort of the lofty sort of vision we want to, we want to see happen. We'll play a, we'll play a skit. No, but I genuinely, I genuinely believe it has that potential.

techer, that it's like, Hey, [: 00:42:00

What's the vision of the world? It's like, yeah, it's a world where. People except it's, I don't want to use the word financial inclusion, but it's more like people have like good quality of life. Like they can live life with dignity regardless of how much income you have. But it's because we have used finance and technology in a way that enables people to have that better quality of life.

Yeah, exactly. Yeah. I think like as a, as a FinTech community, we're all kind of like going towards that, which is awesome. That's why I love it. That's why I love the FinTech space. Yeah. It has

Huw Davies (Ozone API): impact. Yeah. No, absolutely. I could not agree more. Thank you Hugh. No, it's been my pleasure. I've loved the

Monica Millares: chat, Monica.

Thank you. It's been a fascinating, it's been a fascinating conversation. Thank you. Where can we find more about you?

Huw Davies (Ozone API): So our website, ozoneapi. com anyone can look me up on LinkedIn as well. Always, always keen to continue the conversation, but no, thank you.

llares: Thank you. It's been [: 00:43:00

And we'll see you next week. Ciao, ciao.