Barath Narayanan on Open Banking and the API Revolution

Episode Overview

Barath Narayanan is a senior leader at Persistent Systems, where he oversees the Global Banking, Financial Services, and Insurance (BFSI) Unit and the Europe region. With over 24 years of industry experience, Barath is known for his strategic leadership and ability to drive growth, client success, and operational excellence. At Persistent, he leads efforts in strategy, delivery, go-to-market initiatives, and fostering strong relationships with clients and partners.

Barath is deeply knowledgeable about the BFSI sector and the European market, enabling businesses to adapt to changing environments and remain competitive. His approach focuses on leveraging technology for transformation, building customer-centric solutions, and delivering exceptional outcomes.

Before joining Persistent, Barath held a leadership role at Wipro, managing their global Digital & Cloud Business. His expertise spanned application modernization, cloud migration, digital consulting, enterprise architecture, and agile methodologies.

Beyond his professional achievements, Barath is a socially responsible leader who actively participates in charity initiatives. He resides with his wife, Sundari, and daughter, Medha, and is committed to giving back to society while fostering innovation and collaboration in the tech space.

​

Episode Transcript

Barath Narayanan S S : In terms of the new age banking, the open banking, it really brought in an element of financial inclusion and really going towards addressing the people who have been underserved in terms of banking offerings.

 Kevin Rosenquist: Hey, welcome to Pay Pod, where we bring you conversations with the trailblazers shaping the future of payments and fintech. My name is Kevin Rosenquist. Thanks for listening. Today I’m excited to have Barath Narayanan S S  on the show. Barath   is a key leader at Persistent Systems, a global digital engineering powerhouse known for driving innovation in the tech and fintech spaces. Persistent works with some of the world’s leading companies to accelerate digital transformation through cutting edge software, cloud solutions and advanced analytics. We talk a lot about open banking and how APIs are making it much more accessible and safer. So please welcome Barath   Narayanan. So you spent the majority of your career with. Is it Wipro? Wipro? Yeah, yeah, over 23 years, in fact. That’s it. That’s incredible. That’s so unusual these days. What did you see in persistent systems that drew you to them?

Barath Narayanan S S : I, I’ve spent 23 years with Wipro where the foundation was laid. Of course, I grew up there playing 7 to 8 different roles. Mhm. And when I really wanted to take a break and do something very different. Kevin, coincidentally, I met with Sandeep who is the CEO of Persistent, and I was really intrigued by the firm’s growth over the last 4 or 5 years. Right. I spoke to some of my clients who are very close to me in the industry. I engaged with them to understand about persistent, and what I heard was something unique in terms of very focused areas. We do few things and we do really good. Mhm. In the areas of engineering and the areas of payment, the areas of banking that really intrigued me. Of course, clearly Sandeep came across as a leader who was able to influence me into meetings and saying his whole journey till date, but the journey in future, next 3 to 5 years, how does he see the journey next 3 to 5 years? And I wanted to be part of a journey, Kevin, where I thought, we can shape an organization from a culture, from an element of what it is today and evolve it further if we are building it again. Right. So that really created a lot of interest for me to take an opportunity to be part of a persistent journey.

 Kevin Rosenquist: So the broad strokes of what persistent does are to help clients sort of monitor, modernize their tech stacks and improve digital experiences. I’d like to talk about open banking. Can you give everyone a brief overview of what open banking is.

Barath Narayanan S S : See? Maybe I’ll start a little bit with persistence and then get into specific topics on open banking.

 Kevin Rosenquist: Perfect .

Barath Narayanan S S : Persistence. The overall objective has been supporting customers in the whole digital infrastructure. Right. Really transforming enterprises in the digital age. While a lot has happened over the last, I would say 12 years between 2012 to 24, the whole digital infrastructure significantly transformed. And persistent has been one of the players creating that impact. Right. But at the juncture where we are today, in terms of core engineering talent, complemented by artificial intelligence is a unique spot where persistent is to help our customers in terms of helping the clients and banking space, helping the clients and all the three elements of front, middle and back office are really very unique. Intersection, I would say engineering and AI coming together to solve focused business problems right now. Within that, when you bring in open banking. Open banking has significantly evolved over the last 5 to 8 years, a lot more in Europe and UK to be right. Yeah. Directly with you as compared to us,  both regions have seen continuous evolution of open banking. But I would say Europe was driven by regulatory needs versus us was, as always, entrepreneur oriented. The fintech’s coming together, some of the innovative banks coming together to evolve that where you really open up the financial data that exist in large institutions, large banks, and allow the customers to directly manage, engage and leverage their financial information with the broader ecosystem. Now, how do you do that with the very structured interfaces? Structured security, standardization and make sure that the experience of the customer is significantly enhancing. So that’s what the open banking ecosystem really brings in an element of how you create an ecosystem for customers to leverage the financial information in their own way, how they think it is relevant for them.

 Kevin Rosenquist: Okay. It’s said that open banking kind of bridges the gap for underserved populations by granting access to essential financial services. How does open banking achieve this in ways that traditional banking hasn’t thus far?

Barath Narayanan S S : See traditional banks when traditionally right five six years ago, when a large institution had millions of customers and their information, they were limited to a set of products and offerings within that institution, within that bank, within the four walls of the bank, whatever they were offering as a services, the consumers were limited to that. Right. So that’s number one. Number two, in terms of the new age banking, the open banking, it really brought in an element of financial inclusion and really going towards addressing the the people who have been underserved in terms of banking offerings, people who are not really into the credit ecosystem today, but how do you bring them into the ecosystem of banking using the open banking infrastructure? Now, how does that happen when you bring in the fintechs, right? Bring the fintechs to leverage the financial information that exists in the banks. And how do you bring different product offerings that’s relevant to the underserved population who have never been into the digital banking area? And that’s where it has started, really impacting and creating a much larger ecosystem of participants.

 Kevin Rosenquist: Obviously, we’ve been able to share our banking data with third party providers for many years now, but it was different before screen scraping was used. Security was not always the best.  There was a lack of control over the data. How have APIs kind of changed the game when it comes to open banking?

Barath Narayanan S S : So clearly, when you look at the old technology of screen scraping, there was a significant concern of,  your password being shared, your information having to be shared. Right. Right. The risk and fraud was significantly higher. There was less standardization that existed in the old ways of working in open banking. It is all about the the APIs, the standardized APIs that got defined. Now, how does even the API be standardized? Is the regulatory framework that got established and a lot more in use in Europe, right. Where you have the Psd2 in Europe, you have the overall CMAs in UK, where clearly the standardization of APIs came into play, and those API being standardized also significantly improved how the data exchanges happens. Now, yes, you are exposing the financial data of customers with their own agreement, right? Their own acceptance that sure. Yeah. My data. But when you share it, there is a concern of fraud. There is a concern of a data leakage or anything coming into play. And that’s where the API standardization helps in Improved security through tokenization. Through significant elements of technology that is being established today. And that’s where the standardization of APIs clearly addresses the concerns in terms of security and the vulnerability of data.

 Kevin Rosenquist: You mentioned earlier that the US is a little slower as far as open banking is concerned compared to Europe. What do you think that. What do you think the cause of that is? Why do you think that is?

Barath Narayanan S S : I think it is. It is naturally the way the country is operate. Right. The way countries operate. While I would say the US is catching up on the open banking as a regulation, if you see the adoption, it has happened based on the individual organizations innovation focus, individual organizations interest in expanding their,  expanding their own service offerings by leveraging fintech’s. Right. So US has also seen significant shift in terms of adoption of open banking but through innovation channel, but through an entrepreneur driven element of lot of new fintech’s that has come into play like Zella, like played, these are some of the innovations that has significantly changed the ecosystem in US, while Europe is lot more standardized. Right? It is not about an organization’s intent to show innovation. And they go all out, right. You see bit of  non-standardization or a different fragmented approach in US, whereas Europe has gone through clearly defined regulation of CMA in UK or Psd2 in Europe. And how you actually,  adopt that. So that is clearly the reason what we see a difference between the two countries, two regions.

 Kevin Rosenquist: Yeah, they’re in the you know, there’s been regulation and legislation in other countries. Obviously the EU has the revised Payment Services Directive, which mandates that banks must allow customers to share their data and authorize third party providers or with authorized third party providers. The UK has the Competition and Markets Authority, which is enforced open banking to increase competition and improve innovation. The US hasn’t quite followed suit though. Right is the regulation in the States is much less so.

Barath Narayanan S S : While that has been the case, the whole Dodd-Frank act of 1033 rule is actually coming out to address specifically this, this element of regulation. While there is still discussion, it has not been finalized and rolled out yet, but it is anytime now, in the next three, six months, that we could see this rule coming into play, forcing all the banks to actually adopt a standardized mechanism, for sure. So the US is looking at this element. But yes they have not adopted a top down approach of standardized so far. But I think it’s just a matter of time that all the institutions in the US also will look at,  adoption of a standardized regulatory framework.

 Kevin Rosenquist: Consumer control, data security, obviously hot topics in fintech and payments and, and really every aspect of our lives these days. I’ve said this before on this show like we’re kind of cavalier with our data. We just agree. Right. Whenever you download something or whatever, you’re not reading anything. I mean, you mentioned that APIs are a good way to help the security. Is the overall tech improving enough to sort of save us from ourselves, if you will? Are we being more protected now from our own, our own inability to like, be careful with our data?

Barath Narayanan S S : I think technology is evolving on both sides, right? People who are trying to protect and people who are trying to infiltrate.

 Kevin Rosenquist: Right. Yeah.

Barath Narayanan S S : Technology is continuously evolving on both fronts, I would say. Definitely. It has significantly improved in our ability to protect ourselves. Right. As much as there are vulnerabilities that are increasing on a day to day basis on different types of hacks, different types of vulnerabilities that we are seeing in the industry today in terms of technology. Clearly, the organizations have adopted, even while moving on to cloud your own data and payment systems and data has actually started being hosted on cloud. And we saw increased cyber attacks in in last 2 or 3 years. The number of cyber attacks that you have seen is significantly more than the past, but equally the overall protection has improved. And that is also because of the standardization. Right. The consumers have equal responsibility to understand the information that they are sharing. Yeah. To what extent are they sharing what information? At what point is being accepted when they want to look at little bit more advanced services and offerings from different ecosystems. So the consumers also have to be equally responsible while leveraging the technology.

 Kevin Rosenquist: Yeah. No that’s that’s that’s true. Yeah. We have to like I said,  we don’t always think things through do we.you mentioned how like the bad, the bad guys and the good guys are obviously, you know, kind of at a battle and they’re, you know, AI is changing that and is do you, do you see AI leaning one way or the other? Does it help the good guys more? Does it help the bad guys more? Is it somewhere in the middle?

Barath Narayanan S S : Technology is neutral, right? So the good thing about technology is neutral. It depends on whose hand it is and how that is leveraged for, for sure. Yeah, I’m coming across a bit more,   philosophical in, in this element.

 Kevin Rosenquist: But that’s okay.

Barath Narayanan S S : But the fact is technology is same for both guys who are trying to infiltrate as compared to guys who are trying to protect. But the element is the number of institutions who are investing significantly in protecting the consumers is,  much more than what is happening in the other areas for sure today. Mhm. And that’s where the coming in of AI artificial intelligence. Right. How you develop the models, what models you adopt for what kind of problems, which LMS or which models that you really look at to solve the problems or leverage to accelerate a solution really, really matters. You can’t generalize by having the same approach of artificial intelligence for different segments of the industries or problem statements, right? Within banks, within the payment ecosystem versus,  let’s say,  a client experience channel or a chat chat channel, you have to use significantly different models and different AI solutions with the required guardrails to protect the information. So there is always this element of maker and checker process, right? We always suggest to use AI for the maker process. But the checker process has to be independent to validate the models that are developing information. Validate that and then you take it forward.

 Kevin Rosenquist: Um.

Barath Narayanan S S : Even even in the payment space, when you’re looking at lot of new innovations that has come and come out in the payment space using open banking,  significant innovation, right? You have account account transfer that happens seamlessly now and without going through the card network or Swift network. The payment channels are direct between the two accounts. It’s very important to understand who the other consumer is, where the information is getting moved, where the money movement happens, and how you use artificial intelligence in the API layer. You have a lot of advancements of artificial intelligence in the API layer, machine learning languages in the API layer that you can start looking at. Okay, if Barrett is trying to transfer money to say Kevin, it can clearly understand the interfaces. And are we using the right interface? Is it really Kevin’s account? And it’s not getting directed to a different Kevin with a different last name. All those elements can be clearly validated and confirmed.

 Kevin Rosenquist: Okay.

Barath Narayanan S S : And that is the evolution of AI. We see in the open banking space in the API layer.

 Kevin Rosenquist: Yeah, with open banking. And another challenge seems to be harmonization. Global inconsistencies and regulatory frameworks have created barriers to scaling open banking across different markets. What needs to happen to break through those barriers, do you think?

Barath Narayanan S S :  no. You need to repeat that.

 Kevin Rosenquist: So like, you know, harmonization, you know, global inconsistencies, regulatory frameworks. Yeah. Kind of create barriers. Like what? How can we all figure out a way to kind of knock some of these barriers down?

Barath Narayanan S S : Well, as we spoke early, it is clearly regulatory. It’s US versus Europe which is clearly articulated. Right. Yeah. Where the adoption of the regulatory requirements is going to be absolutely a mandate, right. In terms of us, definitely. We need to see a significant movement in quickly understanding the regulatory needs and rolling out open banking regulatory requirements in the US from an adoption by all the institutions in a very structured and standardized way. Today, it is fragmented depending on which institution has engagement with which fintech right or which are third party solutions or ecosystems that they want to involve. It is left to individual decisions of the institutions and the ecosystem. Right. And that is where the adoption of the regulatory framework is going to make it more consistent and will address the challenge that you are talking about.

 Kevin Rosenquist: Mhm. Yeah. Yeah. Yeah.  real real time payments is another aspect,  that we talk about a lot today. A lot along with more alternatives to the traditional card based payments. But of course real time payments comes with their own concerns. Like I’ve talked to people on this show about the increased risk and the increased chance of fraud with real time payments. Are we? Are we getting to a point where real time payments can become the norm, while still keeping data safe and limiting fraud?

Barath Narayanan S S : So technology has evolved to such an extent that absolutely possible. Yeah. The real time payments if you look at different ecosystems within us, real time payment happens there. Right. And if you look at countries in Asia and Europe, real time payment has become a way of life, whereas we still have ACH, we still have the element of different kind of payment channels still existing. But clearly,  if I see the whole evolution of technology that is happening in the payment space, that is the way to go for us also. And that is happening in,  in,  different institutions. I would say.

 Kevin Rosenquist: As far as open banking is, is this is the concept spreading to other areas like insurance and investments. And if so, what does that look like?

Barath Narayanan S S : I’ve seen open banking definitely spilling out in shorts and to an extent even health tech. But let’s let’s focus on. We see we work with 40, 45% of my business today within banking financial services and insurance is with fintech’s and fintech. That’s something unique about persistence, right?

 Kevin Rosenquist: Yeah, yeah.

Barath Narayanan S S : Now when we work with fintech firms or fintech’s, they significantly look at the ecosystem. They are all about embedding and looking at embedded finance. Right. Looking at an element of the API layer, the APIs, open banking APIs to interact with different third party solutions, different solution that is existing in the market, even non-financial players. Right. Like your social media or like your e-commerce channel, and you have embedded finance there as a third party solution, and you’re able to allow your consumers to leverage that third party solution via the insurance channel or via the whole e-commerce channel to engage and make decisions then and there. And that’s the beauty of having this whole open banking framework or open banking concept. What does open banking really articulate? Right. You have significant amount of information, right. And how you open up that information to be consumed by different players to add value to your clients. Right. So the institution holding the client information definitely benefits the individual. Consumers benefit by leveraging much broader ecosystem.

 Kevin Rosenquist: And just easier, easier management and all that. Yeah yeah yeah.

Barath Narayanan S S : And me as a consumer can have a single view of information using a third party tool not offered by the bank or the insurance player to have a single view of my all my financials across five different entities or five different institutions where my money is parked.

 Kevin Rosenquist: Yeah, it’s like I think that’s one of the things that people are most excited about with AI just in general, is is just being able to have things in one place because we have we have our we just we’re all over the place now. We got so many different platforms for entertainment and so many different, you know, apps and platforms that we use for business and all this stuff. Like the more we can consolidate the, the, the happier I feel like we’re all going to be. I can speak for myself for sure. Do you? I mean, we were kind of on the on. We’re poised to see some pretty incredible changes over the next few years, or even less, wouldn’t you say, because of this?

Barath Narayanan S S : I think it is not consolidation of information to a single place. It is giving you a consolidated view of the information.

 Kevin Rosenquist: Yeah, that’s a good way to put it. That’s a good way to put.

Barath Narayanan S S : Your information today exists in, I don’t know, thousands of different entities or devices or organizations. Right? Right. But the whole AI or technology innovation has brought in a single pane on your iPad or iPhone or any phones to give you a single view of your entire financial information from 1000 different entities. I think that’s the beauty, or that’s the whole evolution of technology that is helping us today. And that makes your decision making even more appropriate for that particular month or a day or a week of how the markets are reacting or how your financial situation is. Yeah. Right. Like, we do a lot of work with the regional banks and helping them on the digital lending space, right, where the open banking framework is adopted significantly. And they have the API channel. They integrate multiple different solutions into the value chain. It’s not about a single platform at all. There are five different players in the whole value chain of digital lending, and all the five different ecosystems are connected through the API to support the consumer who is trying to do,  kind of take lending at a short notice with the best rate possible and be able to repay that on a regular basis. Right.

 Kevin Rosenquist: Mhm. Yeah. Well exciting things to come for sure.

Barath Narayanan S S : Absolutely.

 Kevin Rosenquist: All right. Well thanks so much for being here. I really appreciate your time and for,  for bestowing your knowledge upon us. Thanks for being here.
Barath Narayanan S S : Thank you. Kevin. Really appreciate it. Great.  discussing with you. take care.