Almost 90 percent of banks are forging a path toward open banking and real-time initiatives. But open banking doesn’t mean that your financial statements will be on the web for anyone to review.
On 13th January 2018, the second Payment Services Directive (PSD2) came into force, defining a new chapter in the European payments market. It requires banks to open their systems to third parties and provide interfaces to them to initiate payments on accounts, retrieve account information and a confirmation of availability of funds on accounts. Application programming interfaces (APIs) play a vital role and standardized APIs are required to avoid fragmentation in the European market, and promote the digital ecosystem. PSD2 does not come with an API standardization. To help fill this gap, the Berlin Group—consisting of almost 40 banks, associations and PSPs from across the EU—has defined a common API standard called “NextGenPSD2”, which provides guidelines to reduces XS2A complexity. It is ready to be used by banks and TPPs for implementing PSD2-required bank account access.
Banks continue to flex their muscles and engage in fintech innovation, opening themselves up in a way previously never thought possible. They were once staunchly resistant to outside intervention, but a recent report from ACI Worldwide and Ovum has revealed that this trend is changing.
A UK payments industry trade body is calling on the Open Banking Implementation Entity (OBIE) to force banks to do more to enable access for fintech firms. The Open Banking era, enabling Brits to share their banking data with trusted third parties, has gotten off to a subdued start in its first few months.
This has prompted the Emerging Payments Association (EPA) to write an open letter to the OBIE demanding amendments to the initiative’s framework to help third parties “realise the potential of Open Banking”.
The Emerging Payments Association (EPA) has written to the Open Banking Implementation Entity(OBIE) calling for the OBIE to amend the terms of the CMA’s framework so that emerging payments organisations can realise the potential of Open Banking.
The EPA’s ‘Open Letter’ represents the views of many EPA members, sharing their concerns about the barriers that could inhibit FinTechs from engaging with Open Banking. EPA members believe that the nine banks currently covered by the Competition and Markets Authority (CMA) framework have displayed varying levels of enthusiasm in embracing certain aspects of Open Banking, with some described as striving to meet the letter, rather than the spirit, of Open Banking.
Open banking is set to revolutionise traditional banking systems across the world and has certainly been making waves down under. This new notion of consumer-centric banking has the potential to seriously change how you handle your personal finances so what better time than now to get a grasp of what it actually is, when it’s likely to be implemented and what open banking means for your future money management
A Quick Introduction to APIs for Folks Interested in Open Banking – SEPA Payments news and views helping corporates navigate payments technology and industry payment trends.
Open banking could provide consumers with better tools and insights for managing their money. It could make the ease of payments you experience with Uber the standard for every transaction. It could provide you with tools to be a savvier shopper.