Interview

Exclusive interview: Konsentus' backstory and the acquisition of OBE from PRETA

Friday 29 January 2021 10:12 CET | Editor: Oana Ifrim | Interview

The Paypers sat down with Mike Woods, CEO of Konsentus, to discuss the drivers and motivations behind the founding of Konsentus and future growth plans for the Konsentus Group following the acquisition of OBE from PRETA 

What is the story of Konsentus? What are your target segments and markets reach? What problems does the company solve and for whom?

Headquartered in the UK, Konsentus was set up in January 2018 to enable financial institutions (FIs) to comply with PSD2 Open Banking regulation and to protect customer account data and funds from the risk of Open Banking fraud. 

Simply put, this means verifying in real-time that third parties are both legitimate and authorised by their country’s regulator to provide the services being requested. 

In November 2018, we launched our cloud-based technology platform, Konsentus Verify, which offers a unique end-to-end proposition combining both the identity and regulatory checking of Open Banking third party providers (TPPs). 

The solution essentially consolidates data from across a multitude of regulatory databases and registers from the UK and Europe, providing the information back to Financial Institutions in real-time, so that they can make informed risk management decisions.  

Our partners and customers know that when a transaction request has been put through the Konsentus Verify platform, they are given the information required to make the right decision as to whether or not to grant a TPP access to account data or funds.  

Ultimately, by providing this essential regulatory support and removing a lot of the heavy lifting that banks (FIs) would otherwise have to do themselves, we are ensuring trust and confidence in the whole Open Banking ecosystem and driving forward product innovation and change – one of the main motivators of the PSD2 regulation.  

Recently, Konsentus announced that it has acquired Open Banking Europe from PRETA. What was the reasoning behind this move? What benefits and opportunities do you expect to draw from this acquisition? 

PRETA, a fully owned subsidiary of EBA CLEARING, the provider of pan-European payment infrastructure solutions currently owned by 53 shareholder banks, was created in 2013 to develop and innovate market competitive services in digital payment and identity solutions, PRETA’s objective was to ensure the protection of people’s cyber, electronic, and digital identity and empower them with secure and simple solutions for their online and mobile activities.

For Konsentus, working with PRETA’s Open Banking Europe (OBE) was an obvious next step to accelerate our European expansion and cement our position as a market leader, as it would enable us to add to our fast-growing client list. We are delighted to welcome the clients of PRETA OBE, comprising over 500 financial institutions, including some of the biggest banks within Europe (SocGen, ING, HSBC etc), who have now become Konsentus’ clients. 

Konsentus and OBE were aligned when it came to Open Banking and its evolution towards Open Finance and Open Data. The acquisition will allow OBE to become a part of a global business and drive forward innovation at a faster pace.

This move will also allow us to take the OBE Membership Programme globally, where we can launch an OBE equivalent in Latin America, Canada, Asia, and so on. The Membership Programme brings people together to discuss issues with the market and brainstorm solutions and ideas. It was created to help the wider community find practical solutions to topics related to Open Banking and PSD2 and to provide key information to the different market stakeholders.

This year, we’ll be focusing on international markets as we are planning to become a truly global business. At the moment, we are analysing several markets where we’ll be looking to go live later in 2021. These include the Middle East (Saudi Arabia, specifically), Brazil, Mexico, Colombia, countries across Asia, Australia, and Canada.

How is the initiative a step towards Open Finance?

We aim to become relevant players in Open Finance and Open Data. The piece of infrastructure which services banks’ demands for Open Banking is completely applicable to Open Finance markets (pensions or mortgages, for example). These markets will need a solution such as Konsentus Verify for doing exactly what we`re currently doing in Open Banking. 

When we transition across to Open Finance, we will still need to protect data and identities. That’s why we designed a solution which can be deployed and applied to Open Finance and other verticals and sectors (such as healthcare), as these will undoubtedly encounter similar issues.

How does this deal fit in Konsentus` growth plans related to global expansion, product pipeline, and growing partner and customer base? 

The plans for 2021 are still related to growth and market share gain in Europe, where we aim to reach between 40% to 50% by the end of the year.

Moreover, we are currently working on a substantial global partnership programme with some of the biggest technology companies worldwide through ‘indirect distribution’. This approach aims to establish strategic partnerships which will allow us to expand into markets outside Europe.

Later in 2021, we will start bringing new Open Banking solutions to market and are focused on other issues that we believe the market is facing (particularly related to fraud and data insights). We are confident that Konsentus will consolidate its market position over the next few years and will continue to find exciting opportunities for expansion.

How does the initiative benefit OBE customers? And how does the acquisition help with OBE`s ambition to boost Open Banking globally?

With our global expansion plans, product pipeline, and fast-growing partner and customer base, Konsentus is well-placed to pursue the initial ambition for OBE to boost safe and secure Open Banking globally. 

The acquisition will allow OBE clients to continue to benefit from innovative Open Banking services on a European and global scale and help us drive confidence and trust in the wider ecosystem.

About Mike Woods

Mike has enjoyed a leadership career spanning retail, banking and technology companies. Previously, an Executive Director at Natwest Bank and then the Royal Bank of Scotland, Mike headed up a group comprising over 1,000 colleagues and was responsible for ecommerce and payments across Corporate & Retail Banking and Investment Management. Mike has also held multiple roles specialising in fintech mergers and acquisitions and, most recently, led the Konsentus acquisition of Open Banking Europe from PRETA, making Konsentus the European market leader in the provision of Open Banking Regulatory and Identity checking services. 

About Konsentus

The Konsentus Group comprises Konsentus Limited and Open Banking Europe S.A.S.  Konsentus Limited provides identity and regulatory checking services protecting organisations against the risk of open banking fraud. Open Banking Europe S.A.S. fosters innovation, competition, and efficiency to increase consumer choice and enhance security for online payments. Headquartered in the UK with a European base in France, Konsentus also has extensive operations across the rest of Europe. ISO 27001 certified.

 


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Keywords: Mike Woods, Konsentus, PRETA, OBE, Open Banking Europe, Open Banking, regulation, financial institutions, fraud, TPP checking, Konsentus Verify, TPPs, banking, fintech, Open Finance, expansion, PSD2, acquisition, identity checking
Categories: Banking & Fintech | Online & Mobile Banking
Countries: World
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Banking & Fintech