Raidiam is at the forefront of developing secure data-sharing ecosystems, fundamentally altering the way individuals engage with their digital identities. Tapping companies like Raidiam benefits businesses and helps them be more equipped with enhanced accessibility, improved decision-making processes, and tailored experiences for their customers. This interconnectedness not only optimizes operational efficiency but also opens avenues for innovation and growth. Additionally, by prioritizing security and trust, these ecosystems ensure the responsible and ethical handling of data, contributing to a more reliable and sustainable digital environment.
Raidiam’s VP for Open Banking and Smart Data is Mr. Eyal Sivan, also known as Mr. Open Banking. Through his podcast and extensive industry involvement, Eyal drives the global shift towards open finance.
Additionally, he has actively contributed to the industry’s advancement through participation in the upcoming Americas Cash Cycle & Payments Seminar.
Editor, Joan Ko, from the Payments Consulting Network recently had the opportunity to engage in a discussion with Mr. Sivan, shedding light on the impactful ways in which Eyal and Raidiam’s expertise are driving transformative change within the payments industry.
JK: Please provide a brief high-level overview of your business.
ES: Raidiam was founded in the UK in 2016 by Ralph Bragg and Barry O’Donohoe when tasked with delivering the world’s very first trust framework to enable open banking in the UK. Serving a key role supporting the UK’s Open Banking Implementation Entity (OBIE), Raidiam was instrumental in delivering one of the world’s most advanced open banking ecosystems at nation-scale. Then, starting in 2019, Raidiam worked with the Central Bank of Brazil to realize its open data aspirations, resulting in the most rapid, robust implementation of open banking to date and the most widely adopted by consumers. This was followed by the implementation of open insurance, using the same secure, flexible, and useable technologies provided by us. We continue to support the running and growth of both ecosystems today.
Although Raidiam is a relatively small company, we punch well above our weight. Today, we work with businesses, consortiums, governments, regulators, and central banks the world over to help them create and control their own trusted data sharing ecosystems. Whilst our origins lie in open banking, our reach goes beyond this sector. We also power ConnectID, a revolutionary Australian national digital identity exchange for ID verification and provide the trust framework that underpins work by Icebreaker One in the UK to address net zero through secure data sharing.
Our product suite features three key offerings: Raidiam Connect, our award-winning, purpose-built trust platform technology suite; Raidiam Assure, our proven conformance testing and certification solution; and Raidiam Enable, our specialized consulting services to ensure our clients have all the expertise and tools they need to successfully realise their data sharing goals.
JK: Can you elaborate on your payments industry experience and what will be your role at the upcoming AMERICAS Cash Cycle and Payments seminar?
ES: Open banking is primarily about the adoption of common, open standards for the secure exchange of financial data, based on the customer’s consent. Although these standards cover more than payments, the ability to initiate payments and move money is a crucial element of a successful open banking program. As such, well-defined integration between national open banking initiatives and national payment rail initiatives is crucial. Payments initiatives like FedNow in the US, SEPA Instant in Europe or Faster Payments in the UK are all eyeing the best way to integrate with their respective open banking regimes – this is precisely the link I am interested in and where my specialization lies. It also helps that I worked as an Architect for a major Canadian bank for 15 years, including integrating with payments systems.
At the upcoming Americas Cash Cycle and Payments Seminar, I will be participating in a panel discussing how AI and open banking will revolutionize payments. As a newcomer to the community, I’m hoping that the delegates will benefit from my contribution and I’m eager to learn about their areas of interest, around open banking, payments and otherwise.
JK: What are you most looking forward to in the upcoming AMERICAS Cash Cycle and Payments Seminar and how do you think attendees will benefit from it?
ES: More than anything, I’m looking forward to learning from the other participants. As this will be my first Cash Cycle and Payments Seminar, I’m excited to get to know the community that Currency Research has helped foster and to gain the perspectives provided by international central bankers and other delegates from all over the world.
JK: What services do you offer merchants and not-for-profit organisations in Australia or in other countries?
ES: Raidiam provides the underlying technology infrastructure and framework that enables participants in the payments ecosystem to trust each other.
That means that, using our technology, Payments Services Providers (PSPs), banks, as well as any other organization sending or receiving payments, can be programmatically certified and accredited to participate in the ecosystem, and then authenticated and authorized every time they process a payment transaction. These capabilities provide the crucial elements necessary to enable a robust payments infrastructure that all participants can trust.
In Australia in particular, we provide the trust framework that powers ConnectID, their national digital identity solution. ConnectID is an initiative of Australian Payments Plus (AP+), with the country’s big four banks coming together to implement this consortium ecosystem.
JK: In what ways have technological advancements influenced the efficiency and security of businesses? Could you highlight some of the latest technologies being utilized by your company in its backend operations and payment systems?
ES: In general terms, technological advancements continue to have a significant impact on improving both the efficiency and security of digital payments. Some examples include increasingly faster transaction processing, streamlining operations through automation, reducing fraud through biometric / multi-factor authentication and radically increasing global reach through the use of standardized application programming interfaces (APIs).
More recent technologies raise the bar even further. Decentralized Web3 technologies like blockchain and cryptography offer tamper-resistant ledgers and instantaneous settlement. Machine learning and AI are used to detect and prevent fraud, as well as to provide customer insights which match them to customizable products.
At Raidiam, our speciality is securing trust through ecosystem security. In our solutions, we implement the most current open security standards available, in particular those published by the OpenID Foundation (OIDF), including OAuth2, OIDC, FAPI, FAPI2, CIBA, as well as specialized flows like Dynamic Client Registration (DCR) and OIDC Federation.
JK: Eyal, in your current role, how do you ensure that the organization is compliant with all relevant financial regulations?
ES: As a highly specialized technology provider serving central banks, regulators, and bank consortiums, Raidiam not only complies with financial regulations, but we also actually provide the tools that allow the regulators to ensure that all the participants in their financial ecosystem are themselves compliant.
Our Raidiam Assure solution for conformance and certification is built to do just that, providing a programmatic way for ecosystem controllers to test the compliance of participants before admitting them to the ecosystem, and to do so on an ongoing basis. Further, in every region where we operate, we work hand-in-glove with the relevant regulators, often providing expert advice on which direction the regulations should take and how best to implement them in a working system. In fact, in Brazil our Directory (a component of Raidiam Connect) has been recognised as a central element in the Open Finance Technology Suite and our Conformance and Certification Suite (Raidiam Assure) is now listed explicitly as part of the Central Bank of Brazil’s secondary legislation.
JK: How do you approach security measures to protect against theft or fraud in your operations?
ES: As far as security measures, security is at the very heart of everything Raidiam does. Not only does our solution implement the most current security standards, our day-to-day operations are also strictly governed to ensure that all access is based on zero-trust, multi-factor authentication and authorization. All our credentials are tracked in an authenticator which is used to access all our tools. Our commitment to security is demonstrated by achieving ISO 27001 certification and the National Cyber Security Centre (NCSC) Cyber Essentials accreditations. I’d say I’ve never worked in a more secure operational environment at any point in my career.
JK: What were your key achievements over the last 12 months?
ES: Over the past 12 months, Raidiam has continued to enhance and improve our award-winning trust platform solution, including incorporating OpenID Connect Federation, which enables network to network connections without the need for ecosystem controllers to give up their own control or autonomy. This takes data sharing technology to another level by paving the way for cross-sector or global interoperability. We’ve also incorporated FAPI 2.0 security standard; this implements the latest security measures but additionally introduces a level of simplicity that makes it even more secure, cost effective and easy to adopt as it leaves very limited areas for confusion or error. This promotes competition and inclusion in data sharing participation as it removes the technical complexities and need for substantial resources for those smaller institutions who may otherwise struggle to participate. We continue to seek enhancements and improvements based on real-world feedback from production implementations at the national level.
We also saw ConnectID in Australia go live, powered by the version of Raidiam Connect outlined above. Beyond specific product implementations, we act as an expert adviser and guide to open banking practitioners in regions throughout the world.
JK: In what ways does Web3 facilitate more secure, transparent, and efficient transactions compared to conventional payment systems, particularly in open banking environments?
ES: Web3 transactions, which is to say those processed using distributed ledger technology (DLT) or other decentralized means, offer several advantages over conventional payment systems. Blockchain systems based on DLT provide a high level of security and cryptography, immutable record keeping that is often publicly transparent, and reduced costs when compared to traditional payment systems.
Moreover, Web3 shares a strong alignment with open banking. Both are concerned with reducing concentrations of power, both aim to create more competition and innovation in the market, both promote the adoption of fair, open, inclusive standards and perhaps most of all, both promote the idea and users own and control their data.
JK: What are the potential challenges or regulatory considerations that businesses in the payments industry should be aware of when transitioning to a Web3-based infrastructure?
ES: As the Web3 space continues to evolve, it will be essential to address these challenges to fully realize the potential of Web3 for secure, transparent, and efficient payments.
Regulatory considerations encompass licensing, taxation, AML/KYC, data privacy, sanctions compliance, securities regulations, custody, third-party services, and reporting obligations. To successfully navigate this transition, businesses must stay informed about evolving regulations, address data privacy and security, and seek legal counsel to ensure compliance with the complex and rapidly changing regulatory landscape in various jurisdictions.
JK: How can businesses choose the right payment solutions to suit their unique needs and volumes?
To choose the right payment solutions tailored to their specific needs and transaction volumes, businesses should begin by comprehensively assessing their requirements and expected growth. Factors to consider include the types of payments to accept, security and compliance measures, ease of integration, user experience, costs, international transaction support, customer service, data analytics, scalability, omni-channel capabilities, and adaptability to emerging technologies.
The question of whether Web3 or traditional payments systems are going to be more suitable is subject to the specific needs of the particular region. However, continuous evaluation and optimization of payment solutions are key to maintaining competitiveness and meeting evolving business needs, especially as the underlying technologies are evolving so rapidly themselves.
JK: How can businesses leverage Web3 technologies to create new revenue streams and optimize their current digital payment offerings?
ES: Businesses can tap into Web3 technologies to unlock new revenue streams and optimize their digital payments in several ways. By accepting cryptocurrencies and integrating blockchain-based assets, companies can attract a broader customer base and earn revenue through transaction fees and increased sales. Exploring tokenization, NFTs, and digital collectibles allows for monetizing unique digital assets, while smart contracts automate agreements, reducing operational costs.
DeFi integration, governance tokens, and participation in decentralized marketplaces offer opportunities for revenue generation, and content creators can leverage blockchain for content monetization. By offering supply chain transparency, digital identity services, and cross-border payment solutions, businesses can address emerging needs and cultivate revenue streams, all at a radically reduced cost when compared to providing the equivalent functionality on legacy payment systems. Additionally, consulting services, educational resources, and partnerships within the evolving Web3 ecosystem contribute to diversifying income sources, fostering innovation, and increasing brand recognition, in particular among younger, tech-savvy demographics.
The key to success in the Web3 space lies not only in reaping the benefits of the new technologies, but also in embracing the need for complementary regulation and governance. By finding a way to leverage the best of traditional banking systems and the best of Web3, financial service providers and their regulatory companions can together begin to build trust and confidence among customers, which is the cornerstone of any strong financial ecosystem.
JK: For businesses with international operations (using open banking or cross-border payment options), what are some key considerations when it comes to managing cash across different currencies and jurisdictions?
ES: For businesses with international operations and cross-border payment needs, managing cash across various currencies and jurisdictions requires careful consideration. Key factors to address include currency exchange rate fluctuations, hedging strategies to mitigate forex risks, and transaction costs. Effective cash management necessitates a solid understanding of local regulations, tax implications, and compliance requirements in each jurisdiction.
Furthermore, optimizing liquidity involves centralizing funds across different accounts and leveraging digital payment systems for efficient, cost-effective cross-border transactions. Businesses should also evaluate potential banking relationships and use advanced treasury management tools to monitor, forecast, and manage their cash positions effectively across multiple currencies, ensuring financial stability and operational efficiency. Initiatives are underway in several jurisdictions to open up treasury data, but it remains early days.
JK: What industry changes or trends to do you see occurring over the next 2-3 years that will have a major impact on your business and/or your clients?
ES: Open banking continues to expand all around the world. A recent report cited 68 different countries where open banking was either live or underway. Many regions are still in the process of bringing together their first attempt, while many others are already moving towards a second or third iteration. Notably, the US Consumer Financial Protection Bureau (CFPB) has issued a proposed rule which aims to enshrine a customer’s right to their personal finance data as a stepping stone towards US open banking, with the rule potentially coming into effect as early as 2024.
Meanwhile in Europe, the Payment Services Regulation (PSR) combined with the third Payment Services Directive (PSD3) seeks to revise existing rules to increase innovation and drive competition in the payments market by allowing non-bank PSPs to compete with banks more easily. Africa, South America, Asia and the Middle-East are all undertaking similar initiatives in varying degrees.
Over the next 2-3 years, all of these initiatives will continue to grow and expand, especially as they begin to wrestle with the inevitable overlap between open banking, payments, and digital ID. What all these ecosystems have in common is that they all require trust – and Raidiam will be there to help.
Those who wish to discover more about the evolving cash and payments landscape will get valuable insights from the upcoming Americas Cash Cycle Summit which will take place from November 27-30 of this year. This event is the most recognized educational seminar in the region to focus on the complete cash and payment cycle, promoting efficiency and security in cash and payment operations by Central Banks, Commercial Banks, Cash Management Companies (CMCs) / CITs and retailers.
In a significant development, this year marks the inclusion of a payments program alongside the traditional cash program, resulting in the formation of The Americas Cash Cycle & Payments Seminar. The program concentrates on regional implications and the latest trends in the cash and payments sector. Attendees will have a unique opportunity to gain insights from regional experts and stay updated on the most recent trends and advancements in cash and payments. Eyal’s attendance underscores his commitment to keeping their organization competitive in the dynamic payments landscape.
Author: Joan Ko, Editor, Payments Consulting Network
Joan brings over 12 years of invaluable experience in content production and copywriting to her role as Editor. Her strong collaboration with the consulting and marketing teams, has allowed her to seamlessly merge these creative domains, and craft compelling written and visual content that not only captivate, but also communicate with precision and clarity.
Payments Consulting Network is a media partner of Americas Cash Cycle Seminar.
Eyal Sivan is one of the panelists of “How Will AI & Open Banking Revolutionize Payments?” at the upcoming seminar.
View the full agenda here.
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