Assignment - Open Banking in Fintech

  • Find out what the regulators in your region are doing within Open Banking. Are they doing something? If so, try to figure out how far have they come and what will or is included in the regulation. Share your findings in the Forum.
  • Take a look at a couple of banks active in your region and what kind of developer portals and help they are offering. Can you use any of this for your fintech ideas? Is the service for free or how much will it cost? Share your findings in the forum.
  • Research some Fintech API Aggregators in your area and share them in the forum.
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  1. About my country, Italy, I found an interesting interview with Ms Marie Johansson, country manager for Italy branch of Tink. She states that Italy had the higher percentage of operative APIs in Europe and generally speaking banks see the PSD regulatory as an opportunity (Interview in Italian language https://www.pmi.it/economia/mercati/320253/la-rivoluzione-open-banking-in-italia-con-tink.html).
  2. The three biggest Italian banks seem to be ready for providing API service. Their developer portals are here:
    a. Banca Intesa: https://openbanking.intesasanpaolo.com/#/
    b. Unicredit: https://developer.unicredit.eu/
    c. Monte Paschi MPS https://www.mps.it/PSD2/open-banking.html
    This last bank seems less open, since API website is only in Italian language and instructions are anyway not very clear. All the banks are offering the API for free.
  3. An API aggregator in Italy is Fabrick (https://www.fabrick.com/) Unfortunately I couldn’t find anymore.
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US Region:

1.) Mulesoft: https://www.mulesoft.com/lp/whitepaper/api/open-banking-platform?utm_source=bing&utm_medium=cpc&utm_campaign=b-api-na-search-open-banking&utm_term=what%20is%20open%20banking&utm_content=-s&matchtype=p&device=c

2.) https://blog.strands.com/open-banking-apis
CapitalOne
Citibank
Wells Fargo
BIAN - PNC

3.) US API Aggregator:
PNC Bank

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Sweden is seen to be one of the most advanced fintech countries in the EU and is fast moving towards a cashless society. Sweden is currently testing a CBDC. With that said The Swedish Financial Supervisory Authority issue licences the those active in the fintech space and are generally supportive of open banking. Key regulation include:

  • Directive 2015/2366/EU - Payment Services Directive (PSD2) Implemented May 2018 - which has forced traditional banks to open their databases via standazied interfaces.

  • Act 2010:751 Implemented June 2010 on payment services - which include the first aspects of PSD2 open banking and safeguard for consumers and CRR (capital requirements regulations.

  • Act 2013:862 Financial advise to consumers

Seb, Swedbank, Nordea all have open banking portals with useable APIs available via a subscription model for premium APIs

TINK - Offer API aggregation services to assist with Onboarding, Engagement and Sales within open banking and fintech for over 3400 institutions via a subscription model

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What actions do regulators take regarding Open Banking in your region?
Regulators in Poland only made the necessary amount of open banking regulations required to comply with countries inside the European Union, such as MiFID II, AMLD5, and MiCA.

What kind of developer portals are your local banks offering. How can you use these portals to create your products?
Not all banks in Poland have yet developed their API’s systems, but two banks that are the most innovative in developing their API infrastructure are ING and MBank. Both of them offer the required APIs, such as Payment Initiation Service Provider(PISP) and Account Information Services Provider(AISP). Beyond that, ING bank also provides some paid API’s as Showcase API, Payvision Payments API, and Yolt Technology Services API, which puts them significantly ahead of the lagging pack.

Using the APIs available in some banks and the API aggregators, it would be possible to create an app that automatically searches for the best possible credit depending on the information customer inputs. The service would earn a small % of the recommended bank’s loan earnings, or it can be used to advertise different services through bundling. The method of earning could create conflicts of interest, but hopefully, they would be resolved.

Research some Fintech API Aggregators in your area and share them in the forum
The two biggest, if not the only Fintech API aggregators in Poland are:
https://www.kontomatik.com
https://polishapi.org/en/interfejsy-xs2a

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  • Find out what the regulators in your region are doing within Open Banking. Are they doing something?
    Canadian Securities Administrators (CSA) Regulatory Sandbox, which allows fintechs to obtain certain exemptions to securities laws.
    The British Columbia Securities Commission recognizes the evolving nature of financial technology (fintech) in BC, and has a long-standing tradition of developing regulatory solutions to support entrepreneurs and companies that are launching new ways of conducting business.

*** Take a look at a couple of banks active in your region and what kind of developer portals and help they are offering. Can you use any of this for your fintech ideas? Is the service for free or how much will it cost?
Scotiabank has made its API available on GIthub. The access to the data will be useful in concluding transactions. It’s free for now, no updates as to the cost

*** Research some Fintech API Aggregators in your area and share them in the forum.**
Plaid is an international aggregator, currently starting aggregation in Canada.

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  1. The US government has not take any substantial initiatives to support the development of Open Banking products and services yet. A recent US Treasury report recommended developing regulatory approaches to enable secure data sharing in financial services. However due to the highly fragmented and state-based nature of banking and banking regulation in the US, as well as a cultural aversion to ‘red tape’, there is little discernible appetite currently for taking this forward and issuing a common federal policy on Open Banking.
    However, The major US banks are well aware of the strategic importance of Open Banking and are developing API-based offerings, in contractual partnerships with third parties, as a way to attract new customers and maintain/gain competitive advantage.

2.PLAID offers ACH transfers by connecting accounts from any bank or credit union in the U.S. to the app. You can use free service or choose paid subscription options depending on your needs and usage.

  1. US API aggregator:
    https://www.finicity.com/
    https://www.yodlee.com/
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1.Digital transformation and open banking are unstoppable forces, but Canadian consumers have shown concern about how their financial data is managed.
The financial services industry is addressing this trust issue by working together on standards designed to protect consumers’ information while providing an infrastructure to allow greater flexibility.
Financial Data Exchange (FDX) Canada has been officially launched and comprises 31 organizations leading the Canadian financial services ecosystem, including the Big Five banks. Financial Data Exchange Releases New Open Finance Standards & FDX API Version 4.5
2. Many of the big banks in Canada are in the second phase of open banking and have launched API developer portals.
3. Flinks Api Aggregator -

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  1. https://www.bobsguide.com/guide/news/2020/Dec/9/open-banking-can-turn-into-beyond-banking-predicts-commerzbank/

  2. U.S Bank’s new “portal contains APIs, or application programming interfaces, that enable developers to quickly build innovative services that securely connect to select U.S. Bank account information, as directed by the customer”
    https://www.businesswire.com/news/home/20190923005731/en/U.S.-Bank-Signs-Agreements-With-Top-Data-Aggregators-and-Fintechs-Bolstering-API-Efforts

  3. Plaid, MX, Intuit, Finicity, CashEdge

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  • Unlike in the EU where members are obliged to implement PSD2, a directive intended to opening up payment transactions to non-banks and promote competition, Switzerland has no such regulation in place.

  • b.Link, a platform for the standardized sharing of data between financial institutions and third-party providers. Currently supported by Klara, Credit Suisse, Neue Aargauer Bank and UBS. In addition to that, standards are required to simplify the connection in technical terms and thus, the Common API initiative was launched by the Swiss FinTech Innovations (SFTI)

  • None unfortunately at the moment. Switzerland is closed off from EU Banks

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  1. Spain is part of the EU and therefore the regulations apply there. Open Banking was initiated by the European Parliament in 2015, with the drafting of the revised Payments Services Directive, commonly known as PSD2. Unlike Open Banking in the UK, PSD2 requirements were vague, and as a result, the widespread adoption of a single standard has been difficult thus far. Currently, the most popular standard is the one created by the Berlin Group & its NextGenPSD2 Task Force. It offers four architecture models for authentication: redirect, OAuth 2.0, decoupled and embedded.

  2. The major Spanish banks are all into Fintech. There is a particular interesting portal of BBVA, the bank you mentioned in your seminar:
    https://www.bbvaapimarket.com/en/banking-apis/?filters=country-spain* . As far as I could see participation is free.

  3. https://www.openbankingtracker.com/country/spain is a very interesting web page to find API aggregators operating in Spain.

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My Region: The Netherlands

Currently, in the Netherlands regulators are making Open Banking mandatory for all Dutch banks. The Dutch National Bank has a supervision on Open Banking, making sure all banks comply. More info on this supervision: https://www.dnb.nl/en/binaries/Unchained%20Supervision%20in%20an%20open%20banking%20sector_tcm47-380419.PDF

PSD2 is implemented since 2019
Idea’s about PSD3 are forming as we speak
Access to customer accounts for sharing Data is being investigated and implemented

I found this interesting website tracking Open Banking per country:
https://www.openbankingtracker.com/country/netherlands

Developer portals:

Rabobank: https://developer.rabobank.nl/
costs: https://developer.rabobank.nl/overview/payment-request
example of payment API:

  • Subscription to Payment Request API: €10 per month
  • Payment link request: €0.01 per link requested

ABN AMRO: https://developer.abnamro.com/
ING: https://developer.ing.com/openbanking/home

Fintech API aggregators: https://www.openbankingtracker.com/api-aggregators

  1. EquensWorldOnline https://developer.equensworldline.com/home.html
  2. Yolt https://yts.yolt.com/
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-In Canada, as of late 2019 and early 2020, they are planning to unleash Open Banking regulation.

-RBC (Royal Bank of Canada) offers numerous developer tools / API’s.

A company called Flinks (flinks.io) seems to offer a lot of services across several major Canadian financial institutions.

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Canada.
We are not quite there as of yet. Having said that, there was an open banking conference to be held in April. It has since been postponed due to the pandemic. There is a push to implement services, but there are serious concerns from customers regarding security.
RBC bank appears to be the most progressive.

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1- UK
Open Banking is designed to bring more competition and innovation to financial services. It was set up by the Competition and Markets Authority on behalf of the UK Government.

Every provider that uses Open Banking to offer products and services must be regulated by the FCA or European equivalent. At the moment, the nine biggest banks and building societies are enrolled on the Open Banking Directory, and others are coming soon.Since January 2018, we have heard a lot about Open Banking, the regulation that has released the financial data of consumers from the banks’ ownership and into the hands of consumers. That means regulated banks in the UK are now required to let customers share their transaction data such as spending habits and regular payments with authorised third-party providers (TPPs) offering other services – as long as the customer has given permission.

2- HSBC
We currently provide both APIs and Modified Customer Interfaces (MCI).

In all our European markets (including the UK), you can access all payment accounts for all our banking brands through our MCIs.

https://developer.hsbc.com/#/welcome

Santander

https://developer.santander.co.uk/sanuk/external/product-list

3- True layer -Build applications that securely access data and initiate payments in real time.
Nordigen - https://nordigen.com/ — supports more than 2,500+ banks in UK, Germany, Spain, Poland, Sweden, Denmark, Finland, Estonia, Latvia, Lithuania.

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[quote=“thecil, post:1, topic:27123, full:true”]

  • Find out what the regulators in your region are doing within Open Banking. Are they doing something? If so, try to figure out how far have they come and what will or is included in the regulation. Share your findings in the Forum.
    In Malaysia a simplified regulatory framework will be applied to digital banks during the initial stage of operations, commensurate with an asset threshold of not more than RM3 billion for three to five years.

  • Take a look at a couple of banks active in your region and what kind of developer portals and help they are offering. Can you use any of this for your fintech ideas? Is the service for free or how much will it cost? Share your findings in the forum.
    Not all banks in Malaysia have yet developed their API’s systems.

  • Research some Fintech API Aggregators in your area and share them in the forum.
    https://www.canopy.cloud/

Supports largest banks in Singapore (and some additional countries in Asia)

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  • Find out what the regulators in your region are doing within Open Banking. Are they doing something? If so, try to figure out how far have they come and what will or is included in the regulation. Share your findings in the Forum.
    https://www.regjeringen.no/no/aktuelt/psd2-innlemmes-i-eos-avtalen/id2653794/
    Norway is a part of the EEA agreement in EU and it seems that they decided to make PSD2 a part of the EEA in 2019, but I saw sbanken in Norway started working on open banking in 2018. Nordea in 2017 I think. But they are swedish, so they were forced before Norway to implement this directive. Sbanken is a popular bank in Norway and they knew this was coming, so they adapted. We should be inspired by this and adapt to change

  • Take a look at a couple of banks active in your region and what kind of developer portals and help they are offering. Can you use any of this for your fintech ideas? Is the service for free or how much will it cost? Share your findings in the forum.
    Sbanken: https://sbanken.no/bruke/open-banking/

DnB: https://developer.dnb.no/documentation/open-banking

It seems that both have free services when it comes to open banking. All the information is open to GitHub. The interface was really confusing to a non-developer like me. So you need help from a CTO or a developer to consider these services.

I didn’t find anything to use for my idea

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  1. Canada’s Fintech community lags behind much of the world in developing an open banking standard. The Department of Finance resumed with virtual consultations in November 2020 after previous delays due to Covid-19. In addition to delaying consultations, the government also rejected a number of proposals from Fintech organizations to help distribute Covid-19 relief to businesses. Such organizations were used in other countries (USA, UK) to help distribute Covid-19 relief. This resulted in members of the Fintech community to call on the government to justify their decision.

  2. Banks and Fintech providers are lobbying for Fintech regulations to be expedited.

  3. Flinks and Plaid are two API aggregators in Canada.

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*Find out what the regulators in your region are doing within Open Banking. Are they doing something? If so, try to figure out how far have they come and what will or is included in the regulation. Share your findings in the Forum.

The UK was the first country jurisdiction to introduce a regulatory framework for Open Banking with the Open Banking Implementation directive issued in 2016. According to Wikipedia " In August 2016, the United Kingdom Competition and Markets Authority (CMA) issued a ruling that required the nine-biggest UK banks… … to allow licensed startups direct access to their data down to the level of transactions." The direction came into force on January 13, 2018, and using standards and systems created by Open Banking Limited, a non-profit created especially for the task. However, enforcement rests with the Competition & Markets Authority. Protection for consumers is the responsibility of the Financial Conduct Authority (FCA) (- for account information and payment initiation services, under the PSD2 directive) or the Information Commissioner’s Office for data. The CMA direction only applies to the nine largest banks and works alongside the broader PSD2 rules that apply to all payment account providers. As of January 2020, there are 202 FCA-regulated providers who are enrolled in Open Banking. Many of them provide financial apps that help manage finances and also consumer credit firms who use Open Banking to access account information for affordability checks and verification.

In the context of RegTech, according to Global Legal Insights “one of the major uses of RegTech has been in the launch of Open Banking. This allows banks to provide access to customers’ data through third-party providers (“TPP”), using a secure application programme interface (“API”). Regulatory changes such as the implementation of the Payment Services Directive (“PSD 2”) have made this possible. There are at least 2043 TPP firms authorised to operate in the UK and the number of new customers each day who are sharing their data via Open Banking to aggregate their accounts has now hit the one million milestone. 4 The UK regulators have been keen to encourage innovation and the use of technology in financial services with the Financial Conduct Authority’s (“FCA”) Innovation Hub and Regulatory Sandbox (see below). The FCA is also one of the regulators involved in creating a global sandbox under the Global Financial Innovation Network (“GFIN”).”

In the context arising out of Brexit - limit the risk of disruption to open banking services - the FCA’s website states (from November 2020):

"The FCA’s changes will permit UK-based third-party providers (TPPs) to use an alternative to eIDAS certificates to access customer account information from account providers, or initiate payments, after Brexit. Firms must act to ensure they can continue to provide open banking services.

eIDAS certificates are required for TPPs to identify themselves to account providers and allow firms to interact and share customer account information online in a trusted and secure way. Under the Strong Customer Authentication Regulatory Technical Standards (SCA-RTS), they are the only accepted identification standard permitted between providers of open banking services in the EU.

However, in July 2020 the European Banking Authority (EBA) announced that eIDAS certificates of UK TPPs would be revoked when the transition period ends on 31 December 2020. The near final instrument, published by the FCA, allows TPPs to rely on an alternative certificate.

The changes will mean:

  • UK-based TPPs will likely need to obtain a new certificate to be able to continue to provide open banking services in the UK, post-Brexit
  • Account providers (e.g. banks) will likely need to make technical changes to their systems to enable TPPs to continue accessing customer account information, by accepting an alternative certificate and informing TPPs as soon as possible which certificate(s) they will accept

Firms must review the changes immediately and implement any necessary changes as soon as possible. Acknowledging the challenges faced by the industry, the FCA will provide a transition period until the end of June 2021 for complying with our rules."

The UK & its regulators have played - and seemingly continue to play - a leading role in the introduction and ongoing implementation of Open Banking.

*Take a look at a couple of banks active in your region and what kind of developer portals and help they are offering. Can you use any of this for your fintech ideas? Is the service for free or how much will it cost? Share your findings in the forum.

My bank Barclays, have online resources as to:

I see nothing particularly innovative about the way they have approached open banking, although they present a clean website with accessible information. I would instead take inspiration from the likes of Nordea who have taken a more enthusiastic approach to the space - & also look to work with service providers who can also open up opportunities differentiated from an Open Finance and also Sustainability perspective (such as Doconomy and Datia), when looking for multi party integrations with the big banks (& using API Aggregators to short cut this process).

*Research some Fintech API Aggregators in your area and share them in the forum.

Token.io seem to be the best API Aggregtor in the UK, and they have been covered at length in course materials (particularly on Fintechpodden), which was a really interesting interview. TrueLayer are also highly visible in the space since they have partnered with Revolut, as seen in the later case study.

As my Fintech would also incorporate Digital Assets (i.e. crypto’s), I would also look require the services of a crypto-specifc API Aggregator such as CoinAPI (https://www.coinapi.io/) or CryptoAPI. And as crypto payments & transfers tend to be borderless I would assume that finding one region specific to the UK wouldn’t be necessary unless evolving regulations later require it.

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Amazing reply! Thank you for that. :pray:

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