The Connector Podcast

Join the conversation with Frederic Lebeau, co-founder at DataVillage.
He talks about the opportunities for data collaboration in the Financial industry. From open banking to open finance to data collaboration.

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Koen Vanderhoydonk
koen.vanderhoydonk@jointheconnector.com

#FinTech #RegTech #Scaleup #WealthTech

Introduction 0:01
Welcome to the connector podcast, an ongoing conversation connecting fintechs banks and regulators worldwide. Join CEO and founder toe and Vander Heiden as you learn more about the latest available trends and solutions in the markets.

Koen Vanderhoydonk 0:20
Welcome to this new podcast from the connector, and it's the first one and 2023. And I have a special guest with me one of our new customers Frederick, data village, what is it about? Yeah, nice to meet you. Koden.

Frederic Lebeau 0:33
Hello. So first, thank you very much for the opportunity. So I'm a co founder of data village. And my main experiences in the financial industry have worked in Security, Architecture, technology, innovation, you know, open banking, all these funny things, we created data village with Gunther, my co founder with the initial idea that if a financial institution or any organization could access more sensitive data or personal data, without having to manage it, copy it, and giving complete transparency to consumers, it would really open new opportunities. And because how do financial institutions and currently shared the data with each other or not? They do, of course, and today, financial organizations share the data at that API. So typically open banking, you know, with fintechs, but also with even more basic means, such as transferring file with other financial institution regulations. And the main limitation in that way to share data lies in the fact that the data are transferred and copied. So this leads to limitation in opening more data, because you know, the fear of losing competitive advantage when sharing the sensitive data outside of the financial institution, but also, it's also linked to the risk of non compliance with data regulation. So typically GDPR. So both leads to complex adopt mechanism, from financial institutions trying to anonymize data or in also too much friction, very cumbersome. Exactly. In the user experience, you know, with easy content management, that's one of the main drawback of open banking. So banks today, they won't put their crown jewels for grabs. How can you then improve data collaboration? And how can you make it effective and efficient for financial institutions? Because there's a lot to gain from sharing? Yeah, exactly. So you talk about data collaboration. And that's important. That's exactly what can improve efficiency. So unlike data sharing, which transfer data from one entity to another data, collaboration is different. It's about, you know, alone, several entities could be organization, but also consumer to combine the data and execute algorithm for a common purpose in a central place. So it's not about transferring this data or copy this data. That's the main difference. I'm just a simple person. So what you're saying a Fridrich is that you have two complete different datasets, you bring them together, you don't jeopardize any of the privacy, but you can still run analytics on both of them. That is, that's exactly the point. That's what I mean by an algorithm could be any type of algorithm. And the most important is that these data and algorithms remained fully confidential in that environment. Wow. And is this something that is new does is it something that already exists for many years, or it's something that you literally invented?

Koen Vanderhoydonk 3:35
So we don't invent it? So data collaboration is now clearly a trend in the market. So there are a lot of,

Koen Vanderhoydonk 3:44
you know, organization, but also data platform that has talking that are talking more and more about data collaboration.

Frederic Lebeau 3:51
And on the other hand, technology such as confidential computing, these ones are new, clearly there are new mean, depends what do you mean by new but it's not that it exists for five years ago. So it's, that's the tech part. That's the tech part. And this is exactly thanks to that technology, that we are able to achieve that goal, meaning keeping things fully confidential and trusted and secure. And I guess everyone in the audience is very keen, maybe to hear some examples, if you can, can you share some of the live examples where data is shared? Then you got magical resort results? Yeah, sure. There's so many example I would say there are endless opportunities. But basically, you have two type of two categories of data collaboration. There is one related to what we mean aggregated data, meaning allowing particular the search for insights, such as collaborative fraud detection, ESG, risk assessment or benchmarking. This is typically about aggregating data from multiple sources. So in getting in right is your friend. Exactly, exactly. It's a good good, good word. Yeah, exactly. And not

Frederic Lebeau 5:00
or category involve the consumers. It's a bit more complex. But the opportunities are much bigger when you involve consumers in that journey and that collaboration journey, and it allows new iPad personalized product, such as automated product level, cashback, based on receipt data from the retailer. So you cross this receive data with the financial transaction, making sure that both data meaning the receipt data, and the financial transaction remain fully confidential for everyone in that collaboration. There are other examples such as

Frederic Lebeau 5:34
he's gonna continue because it sparked something on me. So what you actually saying is that it's it's going in that direction, where the user also owns the own right to share the data? Is that what you're saying? Because you said two places where you share the data with consent. Exactly. That's, that's very important. And that's why there are these two type of use case. So the one where the consumer is involved is always related to consent, of course, because consent is mandatory. And if you use data for a new purpose that has not been agreed by the consumer, the consumers has to agree. So on these specific use case, effectively, the user the consumer has to give consent to process this data for a specific purpose, but always with the the ID and the objective in mind to keep this data private for consumers, but also for organizations. That's what we mean by privacy by design solution.

Koen Vanderhoydonk 6:34
It almost sounds like GDPR privacy by design. But are we not talking about hyper personalization? Here? It is. But but then next next generation, it's exactly next generation. So it does not mean I mean, I bet personalization does not mean, zero privacy. today. Yes. I mean, there is also a one, I think there was a sort of investigation done or a questionnaire in the market, and it was in Asia. And I believe 60% of people would actually sign in to get personalized information or services from their banks.

Koen Vanderhoydonk 7:11
So that also shows that I guess, people are willing to share the privacy if they get something in return without losing again, crown jewel, second time we use the word today. But if you can share bits and pieces, then maybe it's different is Am I making sense? So yeah, fully, fully then good to hear that they already some numbers,

Frederic Lebeau 7:31
proving that there is the wishes for consumers to bring, you know, to get more from the data. But on the other hand, banks, financial institution or any other organizations need to bring you the right means to make it happen. So that's why the solutions typically confidential computing, but also, we are also using personnel Data Vault brings such a new opportunities for consumers.

Koen Vanderhoydonk 8:02
We talked a couple of times about GDPR and GDPR is the regulator. So how does the regulator come into play? What what's their view on this?

Frederic Lebeau 8:12
This is not only about the financial industry, so today, the European data strategy is really driving this evolution, you know, the the sets of new regulation that are still under definition already approved? Typically, you have the data governance act.

Frederic Lebeau 8:29
So this one is approved, and it will be what is it exactly? If you can maybe explain it to the audience? In a few words? Yeah, sure. Sure. So this data governance, I bring the framework for data sharing and data control. So for for consumers, but also for organizations. So it brings the notion of trusted data intermediary. So this, these data intermediary will rely on new technology, but will bring trust into collaboration, enabling data sharing and trusted data collaboration between different entities, but also ensuring control and privacy for consumers. And this is a framework the main difference compared to GDPR is that is more an enabler. You know, it's really built as an enabler to make it happen and to enable that data sharing, but it's clearly beyond finance. So it's about data sharing across different industry. And this one will be in application as of September 2023.

Koen Vanderhoydonk 9:32
So it's very, very close, very close, very close. But it's funny the way you say it, because it almost sounds like open banking, open finance, collaborative finance, and almost the European Union going in this direction. And it's a fact if you look at the recent discussions, they started with the markets, there was a big discussion or at least the beginning of a discussion about MiFID profiles, so investment profiles for clients. And also there they insinuated that there was a possibility to start sharing a profile amongst different banks. But then, I guess, banks obstructed obstructed to this, because they didn't want to bring the crown jewels. Third time, good time, onto the table. But with this type of technology, this is all possible. I can imagine.

Frederic Lebeau 10:27
It's a very relevant use case again. So yes, clearly, and typically, it brings new opportunities for banks, to bring these data together, booking putting back control the consumers, giving much moreor much better user experience for consumers in regards to them if it profile, but also making sure that the banks keep control of the data. So that's, that's really the I would say the beauty of the solution. It's not that you know, these may fit profile and all the data that are required to calculate this MiFID profile will be shared between all the financial institution it will be used, but not here.

Koen Vanderhoydonk 11:08
So this will be a difficult question and will almost to the end of this conversation. So maybe I can ask you a difficult question, because it all sounds so good, Win Win Win from every site. But where's the catch? No, I don't see any any catch. I think there's real opportunities. The only thing is that

Frederic Lebeau 11:27
the bank should not try to keep the data on their own for sure. That's the main reason. So that so that you bring back the philosophy of open banking actually, exactly. But with my one main difference is thatone of the main reason why open banking is not successful is about this fear of sharing that data.And with data collaboration and privacy preserving technology,you can overcome that, you know, that that problem, which means that now there's no reason with the type of Technology and Opportunity, no reason for banks to keep the data on their own. But also on the other way around, bring new opportunity for banks to access data from other industry. And that's also important, it's not one direction, but really big directional opportunity for financial institution. So that's why it's so, so nice. I mean, to look into the future, with also this new technology that are really enabling new things.

Koen Vanderhoydonk 12:31
So I trust you that there's no catch. I think the only thing left for the banks listening to this podcast is to contact you to get some more insights. But how do they do that?

Frederic Lebeau 12:42
Yeah, of course. So from our website, data, village.me, or through my LinkedIn account, or of course, through email, so contact data village.me, or my personal email for the data. village.me. Excellent. There's a lot of input. We can share much more about, you know, opportunities and technology.

Koen Vanderhoydonk 12:59
Of course, I think you really inspire the audience of this podcast. Thank you so much for Eric, for joining me today. And thank you also to the listeners. And stay tuned for more news from FinTech wealth will come soon. Thank you. Thank you. Good.

Outro 13:13
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