Data aggregation will become a standard offering for banks as part of their product offering, Tanmai Sharma, founder and chief executive of Canopy, tells finews.asia in an exclusive interview.
Tanmai Sharma, did you always believe in your automated account aggregation platform «Canopy», were there times you might have quit?
This is the fourth time I have «gone off the deep end» in my career, so a lot of the journey was expected. Of course the earlier attempts were inside a big bank and this was my first time doing it on my own without a safety net.
Creating a startup is always an incredibly lonely journey for every founder and I suppose mine has been no different. There are ups and downs all the time. However we knew all along that we are onto something big. So never thought of quitting.
Your data aggregation product is embedded in the Credit Suisse Private Banking app now, are other banks lined up?
There is a lot of interest. We are in Proof of Concept with one private bank. Another 3 private banks have told us that they have applied for 2018 budgetary approvals for Canopy.
I expect data aggregation to become a standard offering for banks as part of their product. Currently, Canopy is at an advantage. We are the only player with the technology that takes in data in any format (and APIs are still scarce). Our analytics are also vastly superior to competition.
«There is a first mover advantage at play, the first bank to offer aggregation gets in to pole position»
Customers will aggregate their data – in the U.S. where aggregation has been offered for many years now, millions of accounts get aggregated every day - but they will aggregate with only one bank (not with multiple banks). So there is a first mover advantage at play, the first bank to offer aggregation gets in to pole position.
With so many security hacks, how do you reassure clients about their privacy and security?
Canopy have bank-level security, in terms of processes and encryption levels. In addition, we conduct quarterly penetration tests on our systems. We encourage our customers to anonymize data before sending to us. However, the Canopy platform automatically anonymizes data, at no additional cost.
The application is currently aimed at high net worth individuals and wealth management professionals. Can you see it becoming a mainstream tool for retail clients?
The difficulty in aggregation is that either you capture a customer's entire dataset, across financial institutions and products, or you are not meaningful enough and risk losing the customer.
Partial aggregation, e.g. aggregation solely from screen scraping or expecting a customer to manually enter bulk of their transactions, has been tried and does not work.
Canopy, therefore takes in APIs, data-feeds, SWIFT messages, PDFs and Excel sheets, with the occasional handwritten note and iPhone picture of jewellery receipts! While we are really competitive, it is still too expensive for the retail segment.
«Currently we are laser-focused on the B2B segment of private banks and wealth managers»
However, this is changing as APIs gradually become more widely available. OCBC Bank started offering APIs last year and DBS has just announced their APIs.
We do see a niche for ourselves in the retail space. So far no player has offered proper AI-driven data analysis into retail / mass affluent, so we absolutely see Canopy becoming a mainstream tool. We intend to make a serious dent in that market as and when the stars align.
Currently we are laser-focused on the B2B segment of private banks and wealth managers. We do not expect that to change in the near future.
Are you working on other financial technology apps that will soon be live?
We are opening up our entire analytic suite, to allow our customers to play and experiment. This allows analysis by asset class or advisor, by fractional ownership, single securities or groups of securities. This will initially be available via an Excel interface, so the customers can run their own analysis and create their own reports.
Is there a technology product/platform in the wealth management market you admire?
Yes, Bloomberg. They have a very sticky and addictive product, constantly innovate and take customer service very seriously. New features keep getting added all the time. The approach taken is «let me understand and solve your problem» rather than «here is what I know is good for you.»
«I think there is a place for a cryptocurrency»
Our pricing model and our customer support model is inspired by Bloomberg. In my office I have an Andy Warhol style mural of Michael Bloomberg.
Cryptocurrencies and ICO’s are a hot topic – do you have an opinion on where they are headed?
I think there is a place for a cryptocurrency. The issue is that most of them are not backed by a tangible asset and there is some risk of money laundering and such activities. A cryptocurrency that is backed by a tangible value, for example 1 oz. of gold or a 1 year subscription of Canopy, has mechanisms in place to guard against money laundering, definitely has a place in the world.
Same with ICOs. There is a place for them once the legal framework is established and the fly-by-night operators are rounded up. We ourselves considered issuing an ICO representing future Canopy subscriptions at one point, but did not have the bandwidth to take it to a logical conclusion. Now that MAS has taken a neutral stance on cryptocurrencies, I imagine we will approach investors and other stakeholders for their opinion in the near future.
Tanmai Sharma is the founder and chief executive of fintech company Canopy, a financial data aggregation and insights platform for high net worth individuals and wealth management professionals. Now based in Singapore, Sharma worked with major banks for almost 20 years and is a former Managing Director with Deutsche Bank. He has a MBA in Finance and Systems from Indian Institute of Management, Ahmedabad.
