The phenomenon that is open banking is a classic case study for new-age businesses to thrive. While the concept was initially received with a lot of scepticism, banks are now embracing the myriad of possibilities through open banking as a step closer to digital transformation.

In light of this slow but definite change of mindset comes news that Caxton, a London-based international payments and forex expert, obtained its licence to roll out an open banking solution for its platform earlier this year. The Financial Conduct Authority (FCA) authorised Caxton to provide two new services, through which Caxton’s customers will have visibility of each individual account they hold with their other banks, whilst they use the digital platform provided by Caxton. The company states that this will make payments faster and more convenient in multiple currencies.

CAXTON’S APPROACH TO OPEN BANKING
Rupert Lee-Browne, who started the company in 2002, believes innovation is a cornerstone to success and creating new opportunities in the financial services industry. And open banking is a phenomenal opportunity to achieve this, he says. “Open Banking gives companies like Caxton access to information that we wouldn’t have been able to obtain otherwise.” Through the newly-acquired AIS and PIS certifications, Caxton is excited at the prospect of serving customers more efficiently.

The changing mindset can be attributed to the quality of technology being developed and the variety of use-cases they solve. Caxton has partnered with Token, its main technology provider to roll out AIS and PIS. AIS is Account Information Service, a new type of regulatory permission that allows customers to view multiple payment accounts with different firms through their online access at one CURRENCY payment firm. PIS stands for Payment Initiation Service—this new regulatory permission allows customers to authorise a financial transaction between two accounts after they have been linked by the customer. AIS is useful to procure information about client transactions and history, while PIS allows Caxton to make transactions on behalf of the client with their permission.

Earlier this year, Caxton integrated with Token to enable customers easy loading of their prepaid currency cards with funds directly from their bank accounts via Caxton. Diverting payments through Token, as opposed to debit card rails decreases the cost of payment acceptance by more than 50% and enables instant processing. According to the company, this new settlement time frame improves cash flow management.

Lee-Browne says, “With technology, we’re able to achieve so much. Not only is tech making diverse use cases possible but is also very safe.” Caxton processed millions of transactions last year and has an annual turnover of more than $1.1 billion. For the next year, Lee-Browne is aiming to address the currency needs of corporates and SMEs, which he believes are quite under-served.

INNOVATION A CORNERSTONE FOR SUCCESS AT CAXTON
This need for innovation is not new for Lee-Browne. He started Caxton 15 years ago with a telephone and 25,000 GBP in hand, and launched a prepaid currency card service that was unheard of. Thanks to a Google ad, he procured his first client in less than 20 mins and the ball hasn’t stopped rolling ever since. “What I’m proud of is our organic growth in acquiring clients. When we launched, we witnessed a need for currency cards and dove into making that a reality for customers. Today, with buzzwords like open banking and advanced tech, our endeavour is to keep the suite of new services and products rolling that are in line with the current market needs.”

Lee-Browne is very perceptive of the change in mindset towards tech as he believes conventional organisations have finally understood that tech is here to promote business, mitigate overhead costs, enhance innovation and generate new revenue streams. Particularly pertaining to his line of work, Lee-Browne is of the firm belief that technology only makes customer service better. “If you combine tech with customer service, you don’t need to go by the old adage of tech will replace customer service. I think the two go hand-in-hand. Technology should enable us to serve our customers better, not look to replace human interactions.”

When Open Banking was introduced, there was a lot of nervousness among banks, admits Lee-Browne. And though its been eight months since Open Banking rolled out, progress has been slower than anticipated. Lee-Browne says, “New concepts and services have always taken time to grow on people, especially in the payments space. Contact-less payments, for instance, has taken more than a decade to gain the popularity it enjoys today.”

He anticipates that banks will continue to be selective about who to work with, but attitudes are definitely changing, and this could spell a positive time for companies like Caxton and hundreds of others that have cutting-edge tech and innovative customer service solutions.