Mastercard’s open banking guru on payments and data

FinTech future sat down with Jim Wadsworth, Senior Vice President of Open Banking at Mastercard, at Money 20/20 Europe in Amsterdam to discuss working with fintechs, open banking, transforming into a payment and the protection of customer data.

Jim Wadsworth leads open banking at Mastercard

FinTech Futures: How Mastercard, as a giant, is leveraging fintech agility and agility in the payments ecosystem?

Jim Wadsworth: First, we think it’s very important to stay close, work with and nurture the fintech community. For example, we have a program called Start Path, which works worldwide. It’s really about spotting talent, finding the brightest and best start-ups in a variety of relevant fields.

And sometimes we also work with these fintech services and integrate them into what we do. An example of this is a company called ConsenSys, which is a UK-based regtech. It came through the Start Path program and we were one of the first investors in their first fundraising.

When we see products and services that fit well with what we’re trying to achieve, sometimes we build things, but sometimes we absolutely partner up and take advantage of some of these great fintech services that are out there. So it’s a whole range of approaches. We want to stay very close to this ecosystem because there is so much creativity, so many wonderful things happening that we need to be close to.

What new technologies do you think are transforming or could transform payments?

My field focuses on open banking. From relatively humble beginnings for Mastercard three or four years ago, it’s probably one of, if not the company’s biggest area of ​​investment.

We have over 1,300 people focused on the topic across Mastercard Worldwide, which reflects its importance to the financial services landscape, both payment elements and in terms of data.

If you think of Mastercard, it’s not just a card technology company. We are very explicitly a payment technology company. I happened to join the business through the acquisition of a business called Vocalink in the UK, where Vocalink runs both the account-to-account networks and the faster payment system, which is basically an account to account in real time.

With this acquisition, we have made it clear that we love and care about card volume and that we manufacture and provide all kinds of quality services for the card industry, but we also care just as much about things like account payments advance payment. Open banking is a very logical extension of this when it comes to payments.

But we also believe that the data aspects of open banking, as it has evolved into open finance, are extremely important. We refer to what we are doing in the world of open banking as helping to build a new data network.

One of the big areas that we think of in terms of the value that will come out of open banking is improving access to credit, whether it’s for a consumer or for a small business. We acquired a company in the United States which is an open banking aggregator for the American market. But it’s also incredibly powerful at taking that open banking data, slicing it up, and packaging it in a way that’s useful to lenders. It gathers transaction histories and balances, but it also connects to non-financial data sources such as payroll, which validates a person’s employment status.

How important is data privacy to Mastercard, what infrastructure and policies do you have in place to protect what is very valuable data?

After medical records, financial data is clearly some of the most sensitive personal information there is and protecting it is at the heart of what we do.

About two years ago, we updated our Data Responsibility Principles, and when it comes to any type of product or service we create, we absolutely adhere to them, regardless of regulations. external national governments. We apply these very high standards which tend not only to meet regulatory obligations, but often to exceed them.

Because it’s such a fundamental thing, trust is paramount in this business. We did market research about 18 months ago, which was a global job. In terms of open banking, people’s willingness to engage in open banking was around 63%, I believe. But the caveat was that open banking comes from a counterparty the consumer trusts.

Trust is very hard to gain and very easy to lose. So we work very hard to make sure that the work we do, with respect to the fundamental issue of privacy and control, is driven by the informed and explicit consent of the client. It’s an integral part of how we design our products around the world.