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Core Technologies and Open Banking

Session Objectives

  • Understanding technical architecture of Fintech systems
  • Learning Open Banking and its applications
  • Understanding APIs and their importance
  • Learning emerging technologies (AI, Blockchain)
  • Exploring infrastructure companies (AML, KYC)

Session Content

1

Technical Architecture of Fintech Systems

Modern Architecture (Cloud-Native)

  • Microservices vs Monolithic
  • Cloud Computing (AWS, GCP, Azure)
  • Benefits: Flexibility, rapid scaling, lower cost
  • Comparison: Traditional vs Cloud architecture

APIs in Financial Services

  • What are APIs and their importance
  • RESTful APIs
  • Examples: Stripe API, Plaid API
  • System integration
  • API Security (OAuth, API Keys)

Cybersecurity

  • Encryption: AES-256
  • Multi-Factor Authentication (MFA)
  • Tokenization
  • Penetration Testing
  • Standards: PCI DSS, ISO 27001
2

Open Banking

What is Open Banking?

  • Definition: Sharing financial data via APIs
  • Forcing banks to share customer data (with consent)
  • Unified and standardized APIs
  • Goal: Increase competition and innovation

Open Banking in Saudi Arabia

  • SAMA's Open Data initiative
  • Mowel system for digital financing
  • Standard APIs framework
  • Gradual mandatory implementation
  • Leading companies: Lean Technologies

Use Cases

  • Aggregate accounts from different banks in one app
  • Get loans based on real data
  • Automatically compare financial offers
  • Analyze spending and smart savings
  • Instant income verification for lending

Market Impact

  • Banks: From data monopolizer to service provider
  • Fintechs: Ability to build on bank data
  • Customers: Greater control over data, more options
  • Competition: Increases and services improve
3

Infrastructure and Supporting Service Companies

KYC/AML Services

  • Identity verification: Nafath (Absher), Onfido, Jumio
  • Sanctions Screening: Dow Jones, LexisNexis, ComplyAdvantage, Refinitiv
  • Credit Scoring: SIMAH (Saudi), Experian, Equifax
  • Document Verification: OCR + AI
  • Biometric Verification: Face, Fingerprint

Payment Processing

  • Payment Gateways: Stripe, Checkout.com, PayTabs, Geidea, Payfort
  • Card Processing: Visa, Mastercard
  • Digital Wallet APIs
  • POS Solutions: Rewaa, Foodics
  • International Transfers: Wise, Western Union APIs

Open Banking Providers

  • Lean Technologies (Saudi): Regional leader
  • Plaid (Global): 11,000+ banks
  • Tink (Europe): Open Banking as a Service
  • Finicity: Secure financial data
  • Services: Account Aggregation, Payment Initiation, Data Enrichment

Cloud Infrastructure

  • AWS: Comprehensive services, EC2, Lambda, RDS
  • Google Cloud Platform: BigQuery, AI/ML
  • Microsoft Azure: Specialized financial services
  • Requirements: Compliance certifications, Data residency

Communication Services

  • SMS: Twilio, Nexmo, Local (STC, Mobily)
  • Email: SendGrid, AWS SES
  • Push Notifications: Firebase, OneSignal
  • Chatbots: Dialogflow, IBM Watson
4

Emerging Technologies

Artificial Intelligence in Fintech

  • Fraud Detection: Stripe Radar, FICO
  • Credit Scoring: Smart AI scoring (Upstart)
  • Chatbots: 24/7 customer service (Erica - Bank of America)
  • Robo-Advisors: Automated investment management
  • Personalization: Customized offers and advice

Blockchain and Digital Currencies

  • Definition: Distributed and transparent ledger
  • Applications: International transfers (Ripple), Smart Contracts
  • CBDCs: Central Bank Digital Currencies (Aber project - SAMA)
  • DeFi: Decentralized Finance
  • Saudi position: Cautious on crypto, investing in blockchain

Resources & Links

📚Resources

  • Open Banking: What It Is and How It Works - Plaid
  • AI in Fintech: Use Cases - CB Insights
  • SAMA Report on Blockchain & CBDCs