Open Banking APIs Transform Fintech | Christie Kristensen

Alex: Kristi, you've been in embedded finance for years. When did you first notice the shift from real time being nice to have? If you don't have this, you're pretty much dead. Hello, everybody, and welcome to the Curiosity Code podcast. Today I'm joined by Christy Christensen, who spent her career building embedded finance at mastercard, Aya and World First. We're diving into one of the most quietly explosive shifts in fintech, when instant sentiments become the floor, not the ceiling. And let's get into it. Welcome to the show, Christy.

Christie: Thank you, Alex. I've been looking forward to this conversation.

Alex: All right, let's dive straight into it. Give me the 32nd version. What does real time settlement actually mean for someone who is not in the weeds of payments infrastructure?

Christie: Yeah, and I think let's just look at it from us as human beings. When you go to a shop, or even better, when you are at a restaurant and you're sharing that bill with other colleagues, like friends of yours or family, and you may want to transfer money online, you expect that money to arrive immediately. And when we are also now living in the world where digitalization is part of our everyday lives, we don't even think about it. Everything we do rather going on Netflix for streaming entertainment or going online to look at the latest, you know, shopping opportunity or whatever it might be. You know, we, we are evolved around an ecosystem of instant information activities. We should be able to act upon anything instantly. Now here, if I want something, I'll go and get it and I'll be. It will be delivered on my doorstep within like hours or minutes. So we are living in this, you know, environment that says you can access and do stuff and get things now. And that movement is now coming into the corporate side of the world. Right. But it is just money movement. It is when you release money from your account, your friend, your, you know, your client, whoever it might be on the receiving end, also expects that money to come in instantly. And no lacking. It's not about three days, it's not about minutes. You're sitting there looking at it on your phone and you want to see that money arrive instantly. So that's what it is.

Alex: Interesting. I think we slowly getting spoiled by the technology over these years. You know, you get this instant everything. Yes, but is it instant though? Like, what's the thing most people misunderstood about that instant part?

Christie: Yeah, I think this is really interesting because as you were saying up front, I was at aya, which was one of the first aggregators and open banking players in the Nordics, where I was the chief marketing officer. And we arrived just as open banking became a thing, which means that banks were forced to open up their infrastructure with APIs, which was the first thing that was ever done in terms of. In the Nordics. And that was to really thrive, innovation and open up for an ecosystem where everyone could do really cool, better innovation, financial products and services to customers. And with that, because of AI, because of the technology that allows you to get access, compute to compute instantly and fast, it became that table stick and like the, you know, the, the flooring and not the ceiling. As you said as we entered. What was really interesting is that real time has also been over. You know, you ask compliance and legal. Well, it's not real time real time, but it's near real time. But it is in milliseconds that we as individuals, you know, our, our kind of assumption and our experience to it is real time because again, we're not talking days and hours, we're talking within milliseconds. And I think that's what's gonna, you know, is changing everything because everything has to be so fast. You need to be able to navigate instantly.

Alex: So, Christy, you've been in embedded finance for years. When did you first notice the shift from real time being nice to have to. If you don't have this, you're pretty much dead.

Christie: Yeah, I think it was when, you know, regulation came in and told everyone to open up. And when I say everyone, I mean banks. When the regulation of PST 2 came in, which allowed for the aggregators of bank connectivity and allowing for access to account information and allow for payment initiation and have a direct connection to the communication channel with the bank versus the traditional batch file, which we know today, where you will go in, you'll download a CV CSV file and you will upload it somewhere else. The promise of that innovation and competitiveness because of open banking and allowing for the APIs of regulatory PST2 to thrive, which is the account information and payment initiation that really got people teeth into. What does it mean to be able to actually deliver what is called fintech today? And I think when, when that movement became where more broader organizations realized that they could become a fintech. And the fintech movement actually really thrived and really took off. And also when banks realized they were themselves also a potential consumer of other banks, APIs, I think that's when you really noticed that the, the switch in the market. But also now because you're seeing that again, if I go to the office and I feel like I am working in the 90s, but as soon as I leave the office I feel like I'm back in 2026, you know, right now there's this merge between how I'm living my life on. You know, after 5 or 6 o' clock, whenever you leave the office and until when you re enter the office, you expect that seamless connectivity. Whatever you can do on your mobile phone in your personal life, you should be able to do it as easy in your business life. And I think that merger of how I prefer doing stuff and this simplicity of running a healthy organization is becoming more of table sticks. And again, I think we have just in the, in the payment ecosystem, been a bit slow on really getting the momentum and the adoption that you had hoped for PSD 2 and open banking. But now you're really seeing that this is, is something that's being rallied around and you're seeing a huge rise in fintechs. And now looking into embedded finance, right, where you're looking into also embedded pension information or data with fida or you're looking into investment data. So now you're looking much broader as well on which other data sets could we tap into in order to support customers in their either financially financial health personally or financial health from a business perspective?

Alex: So the transition or transformation is still happening as we speak, Right. So it's not done done for big conventional companies. Any particular product or company made you realize that the game of embedded finance has changed that. Okay. Now that's happening over these years.

Christie: Yeah. And just, just to add to the point you said earlier, right. I kind of see it in these different phases. As you mentioned there you had the first phase was the batch. You have files, you have the traditional upload download. What we usually do with anything financial. Right. A fun anecdote is that Spier, the Money app that was the backbone of the Aya company, the aggregator that I worked with, was because of that pain point of the founder wanting to understand their personal financial health and not just downloading and figuring it out in an Excel sheet, right. So you have that first phase. So you're basically having three phases, right? The first phase being files, the second phase being the regulatory Open banking, where banks were opening up for their AIs and PIs data, account information and payment and information initiation, sorry, payment initiation. And then the third phase being truly embedded. That's where you hear the terms of embedded banking, embedded finance, banking as a service, where you're really going into that next phase and you could almost parallel that with the evolution of technology and the web in general. Where we are in that web three phase, where you really are looking at how can we merge everything, how can you interact with the data and the intelligence and then how can you boost that intelligence into actions and outcomes again to navigate your financial health? And going back to your question on if there was a company that really got me to think about this is really driving a momentum, I would say was not necessarily a company, but it was the rallying around in the fintech ecosystem that you started to see so many innovative founders going in and changing and disrupting old ways of working. So it was more about this momentum in the market that really got me to think, okay, now we're starting to see how this is actually driving impact for the businesses, but more importantly driving impact for customers. Because we see this adoption because technology is no good if you don't have customer adoption, which means that you're actually solving a real problem or pain point. So I think that was, that was when I realized that, that this is not just a regulation mom and dad telling us all to behave in a certain way, but actually opening up the door for something completely different.

Alex: Interesting. By the way, speaking about startups and fintech community now that real time settlement is more or less expected both by end user and by industry in general. New fintechs that entering the market, they have to build it. They have to or they have to build sort of support of real time settlement. Can you walk me through what smaller fintech has to actually build to support real time settlement? And maybe you can speak a bit about what's going to be the cost for that.

Christie: Yeah, I think it's very interesting because we are already beyond that. Right. So I joined Densky bank last year after I have been at MasterCard and I come with a backpack of experience in the API economy. How do you drive growth? How do you launch and support businesses by serving them through API products and services. So with real time settlement with powered by the APIs, you know that is the table sticks now and you have to and you must have an API first mindset. But I would argue that that is almost already yesterday's news, if not for certain. Right. Because now it's all about being agentic by default by native thinking about how can you make sure you build something that also thinks about two consumers. Not only the developer perspective in terms of APIs and engagement and the customer is the human being, but you now also have the second leg which is the agents. Any product you're building in the financial or beyond must be able to tailor those two types of engagements to customers, right? So not only is it important from a real time settlement, API driven, making sure that everything is interconnected and seamlessly with that best experience in the front and center. But equally also how do you ensure that we see big LLMs going out launching engagements with financial institutions? How do you make sure that your service is allowing to communicate with your customers agents? So how do you allow for someone not techie to actually go in and just simply prompt for cash flow forecasting or understanding from a fintech perspective or any startup, my Runway, how much money did I get in, how much money is going out and how much money do I have right now and what does that leave me in terms of Runway and when should I then go to my investors or my bank or anywhere to then reinforce capital into my startup? So I think the conversations are already switching from APIs to agentic and you need to be able to tailor towards both because we also need to remember we still have also people in that third lane which is files, right? So there is still a long journey of adoption and we will have different types of consumers as well as corporates coming along on that journey in different phases. Because change management and adopting new ways of working is the hardest thing to do. But you need to be at the forefront while making sure you don't lose your last your late adopters while you're transitioning.

Alex: Interesting. Let's keep talking about fintech startup community because you are on board now, right? So you see firsthand what's happening with new startups and what problems they are facing in pretty much real time. Hypothetically, if fintech comes to you tomorrow saying Christy, we're going real time, what's the first risk question you would ask them?

Christie: How's your infrastructure and how is your data governance? Because you cannot scale in a business without a strong foundation and infrastructure and you cannot start moving into the agentic world as we spoke about in a second, without true governance around your data and quality of data because that goes in hand, you can't just as we see some places like oh let's just switch on AI that doesn't work, AI need to actually work on the basis of rich data. And if your data and your, your, your, your backyard is a mess, you can't trust what's coming out on the other end of AI, right in your workflows or processes and so forth. So for me those are the two first foundational questions for, for any in terms of just, you know, is your business built on a solid foundation that you can then accelerate and be able to then bring out to other markets? Not to think about, you know, are you thinking global first and not just local, which a lot of startups are doing as well? Let's stay local, let's do it in our home market and then scale. The unicorns you see out there thinks global from day one the same they should they most do today is not only thinking global first, they also think agentic first.

Alex: It's also about ambitions. Right? So if they targeting just local markets, you're treating it as not too attractive, right? In a way. What's the red flag answer that would make you walk away if you ask question about risks?

Christie: There are so many things that comes to my mind, right. But I think again, how is your governance? Do you have the right legal compliance set up and do you have strong understanding of, especially in the fintech space, you're dealing with sensitive information. So it goes back to that infrastructure perspective, but the governance, right. I would say if, if, if someone underestimate the importance of that governance, that's a red flag to me because it is crucial because also if you, if you do not pay attention to those as you grow and of course you need to start somewhere, but if you don't pay attention and you neglect the importance of it, it will backfire because it will lead to data leaks, unhappy satisfied customers, you will lose trust and then you're out of business. So for me the risk and understanding that you're actually working, especially in fintech with sensitive information, that is crucial and you need to make sure that you have a right governance around that. And if you underestimate that or don't neglect the importance of it, that's a red flag to me.

Alex: Here's the next one and I'll probably ask it from my perspective, my personal perspective, because I built in the, in the industry myself as well. And one of the questions you face when you start a new product in your startup is whether to build it yourself or leverage third party. And in the context of real time infrastructure, real time settlement. I'd like to get your take on this. So should smaller players even try to build real time infrastructure or is this the moment they admit they need to become middleware on top of bigger Rails.

Christie: Yeah. What is your core business? What is your absolute core? Because you should not outsource your core. That's my opinion. Anything else that is like to your core plugins, let's say Uber as an example. I love the Uber example. Right. Uber is an infrastructure for you to go to a 2B but they don't have to become a payments provider. They partner with Stripe, they don't need to do the whole grid of the whole world. They partner with Google Maps. Right. So again, think about what is your core of your business and what functionalities is it that you need to add to that core of your organization? And for me, partner again. We are running in a extremely fast environment. Do you have the luxury of time to go out and become the expert of all these features? You need to borrow from others. I would argue no. You need to partner in order to accelerate and move fast. Because otherwise by the time you get to the end of it, God knows what have happened in the world and we are way beyond that. And you are no longer first mover on that idea or better at serving customers with that idea. Someone else have gone in, do it, done those partnerships, here you go, platter to the customers and off they go. So I think really being sure that you understand your business model and what is important to your core and what can you outsource things to speed. So that would be my approach.

Alex: So given that, I would imagine that since it's a very complex technology effort to build real time settlement infrastructure and on top of that you're dealing with governance, you're dealing with compliance. On all of this, I would imagine that the market is slowly getting more or less consolidated by few main players. Do you see that happening?

Christie: I really think it depends on which use cases you're thinking of because I think we are moving into a space where collaboration and partnerships and teaming up becomes more of the essence. Just as an example, if you're looking at stablecoin, another way of thinking about moving money and getting access to capital and so forth, right, the stablecoin movement in terms of how do bank, for example, become part of that play instead of for example Danske bank going out and thinking let's build our own little stablecoin over here in the corner and believe that that's the best thing in the world. Dansky bank have done the opposite. They've gone together and, and rally together with, with many, many other banks in order to actually build a consortium around it. Again, I think it, I'm seeing the opposite where it's more about teaming up for the greater good and then it taps also a little bit into sovereignty. Right. How do we in Europe stay head and head against the, you know, China or the U.S. right. Do we have to be individually really good at all sorts of things? Do we actually rally together and look at Europe and look at the organizations within Europe more holistically and grouped. So I actually think the opposite. There's more of a mentality of teaming up and collaborating versus doing something in a silo per se.

Alex: Love it. Great perspective. Let's talk about the operational side. You've been inside companies, so I'm curious to sneak peek into that aspect as well. Maybe you can share the operational nightmare that people prefer not to talk about. Like I don't know what breaks at 2am when everything is supposed to settle instantly.

Christie: I think we are living in a world where change management is at the essence of things. Right. We talked a little bit About Agentic and AI, we talked about the move into APIs to instant. Right. That also changes people's work patterns and it changes the way that you're thinking about your day job. And what does it mean for you as a cash manager? What does it mean for you as a treasurer? What does it mean for you as a startup founder that needs to make sure that your bookkeeping and your financial health of your organization is on track? And I think in order for us to all be successful in today's world, we need to adopt and be open minded and curious and lean in to constantly understand how we move forward. But that's super hard as well. You know, even going from batch to APIs is not necessarily what everyone dreams about. So how do you bring those people with you that maybe are, you know, see the world the way that it was one day and maybe have needs to be inspired and nudged into how does that now fit into a new world? So I think actually many of the challenges comes into human behavior and change management. And how do we bring people with us. Not so much about bugs and things that breaks and alarms coming up on 2:00 in the morning. Because that have happened over the past decade, you know, since the web got invented. Those issues have occurred because we are living in a digitalized world where things break. And then how do you again make sure that you are resilient enough in your operational structure that when something goes wrong, you have a mechanism around you that supports that. But I think the biggest challenge today is that human side of Change.

Alex: So let's move on to real life product examples because I'd like to get also your perspective because you worked across different companies, MasterCard, Open Banking players. Can you share the real time sentiment example where it actually changed consumer behavior versus just being a backend swap?

Christie: I think the greatest example is in regards to reporting, financial reporting. We had this session and heard this story from a treasurer and she was saying I don't actually want to do anything, I just want to go into a dashboard that tells me if I should do something. The concept of that you need to double check, look, you know, reconcile, look at what is the books and then by the end of that day, you know what happened yesterday that no longer holds water and scale for today because we unfortunately live in times where every single minute of the day something new can come out of someone's mouth that changes everything. And we are living in a world where we have to be agile and be able to move money and move a capital instantly and be very strategic. Which again changes also the way that you're moving from data crunching to strategic guidance and advising to an organization. And I think that is an example of where we are moving, but also what's happening. And that aspect of being able to just be on top of things and know immediately to be able to then strategically act on it is so important. And that's what we're seeing in terms of this concept of like leaning back notified when things happen. That will be the dream scenario. Right. But until then just being able to not have to navigate between two systems. Which is also where, you know, at Danske Bank I work in our integration services where I'm focusing on partnerships specifically with ERPs, Treasury FinTechs. Right, where I provide access to our portfolio of premium APIs. And with that, for example, you know, allowing for that reconciliation in real time within milliseconds so that you and your organization know exactly your financial wealth and what's on the books and you don't need to worry about switching multiple, you know, interfaces. So vary that convenience and the trust in the data and in the view that you see is important.

Alex: We've spoken about those phases, how the evolution of settlement is happening and I imagine there are still banks or players that are still somewhere at the beginning of this journey. If you were advising a traditional bank right now, what's the move for them? Do they rip out legacy systems or partner their way through this or accept they'll just lose a generation of customers? What would be your advice?

Christie: I definitely don't think you can wait around and not look at how do you become a bank as a service and how do you allow to service your customers elsewhere. That's also why I was super enthusiastic and proud of being at Dansky bank because I think we are looking at the world in that way. We're saying whatever platform you want to operate in, we serve you and we understand the importance of real time. And again, I think any bank that sits and have yet to enter that absolutely must get going because we are seeing the adoption already, we are overwhelmed with the attraction in the market and I think it is only about time that you will see the world also moving to that next phase of agentic which we are already seeing in the U.S. i think it's a matter of time. We're going to see that in Europe as well.

Alex: So how long do they have to

Christie: make the choice they need to do it this afternoon, like they need to be on it, like there is no time to waste. I would say that the fact that you're already behind and you haven't gone into it, if that's the case, you better reorganize your organization and really think about how do we serve beyond batch but in real time through APIs because I think the train is like in motion and you better jump on it. So I would say it's rather urgent. So that's my calling. Get on it.

Alex: Who is actually doing this? Well, have you seen really great examples?

Christie: Of course, Danske bank is doing this very well. I'm totally biased here, but no, all jokes aside, actually coming from MasterCard, looking at our API products and services globally across hundreds of product offerings, offers, I am the quality and the standard and then the, the engagement with customers and partners on how to collaborate and how to lean in and allow for that like further enhancement of APIs and keep pushing the limit is extraordinary. But of course if we look outside of eu, you know, Citi, JP Morgan, the big players have always been very innovative and are some that I'm looking towards as well when, when I get inspired of what's happening from a banking perspective in the API scene.

Alex: Last question, five years from now, is real time settlement just table stakes like having a mobile app or does someone figure out how to build a moat on top of it?

Christie: I definitely think it's table sticks. What I think is going to be very fascinating in this next phase that we are in is starting and I had this conversation yesterday actually with, with a friend of mine. When are we going to see that it's not just about the functionalities but then tying it into real behavior and uplift in how we actually support customers in their everyday life so that we switch our mindset from talking about features and functionalities to actually human emotional benefits and value proposition. And I think that's going to be interesting because to your question, it will be table sticks and it's about the mold afterwards, right? Like what does that mean for the business case when the connectivity and engagement and the real access to settlement that, you know, money movement happens instantly? I don't need to worry about, you know, the lack of a couple of days or hours because that's a functionality which will just be that, you know, that is obviously real time. So we are going to switch from that. It becomes a functionality which is worth highlighting because it's new to now. We know it's like this, that is the foundation. Then what, what happens on top. And I think that's going to be very interesting to follow.

Alex: Interestingly enough, I hear it over and over again from different people I talk to and I truly believe that's also the direction where the whole technology evolution would be evolving will be stop focusing on technology itself, but more on the behavioral aspect, the emotional aspect of things. So hopefully that's our bright future.

Christie: I would say so.

Alex: Well, Christy, thank you very much. It's been a great conversation, Alex.

Christie: I have really enjoyed it. Really good conversation and great questions.

Alex: Thank you very much. And for the listeners, don't forget to hit that like button and subscribe to the channel on YouTube or to podcasts and the platforms that you're listening to and see you in the next episodes. Bye. Bye.