Open Banking & Payments
As of January 2018, European Parliament adopted the Payment Services Directive, PSD2. With its aim to force development of innovative solutions by opening up banking data, we definitely have not even seen the beginning of the effect this will have. However, one thing is sure: it’s going to change banking forever.
As coming into force across the European Union in January, we are now served the possibilities of letting intelligent software and new actors manage our money. At the same time, banks are working very hard to adjust to the new economy ecosystem that open banking is opening up.
But what does it really mean to be an open banking platform?
Through infographics, articles and costly extensive reports, Open Banking has been widely explained! Put easy, it changes the performance model of traditional banks, when required at customers’ request to provide their data through accessible APIs for approved agents. With other words, Open Banking is not so much an application or a service, but more than anything a way to facilitate data exchange to create new applications and services, and set the customer in complete control of their own data. When the banks no longer holds the exclusive rights to data management, a world of opportunities opens up!
At NTNU Accel, we wanted to provide the FinTech-ecosystem in Trondheim with valuable insight on how the biggest financial actors in Norway are dealing with the ever changing environment. So, we invited the biggest actors to our incubator, F3, in Trondheim to give us some insight.
(Already eager to attend the next F3 FintechAcademy; “Blockchain from A-Å with Blockchangers” May 24? Get your ticket here.)
Let’s take a glimpse at what we learned through F3 FintechAcademy: Open Banking and Payments!
Firstly, PSD2 requires banks to acquire pre-approval of account sharing and payments, with the customer’s consent.
Most actors agrees that establishments of APIs serves as the most prominent and efficient mechanism for banks. As a minimum to handle PSD2, banks would need to establish these to ensure third parties’ access to customers data.
The banks are already starting to see PSD2s impact in business operations as they are forced to find innovative solutions. All financial institutions now has the opportunity to foster a broader ecosystem of retail partners and fintech building stronger bonds with their existing customers as well as opening up new markets.
At the contrary, the idea behind PSD2 is to open up money management to a greater amount of players, which of course is also impacting the banks. Amongst others, Revolut is an actor Norwegian financial actors are following closely. At the same time as opening up the market to other actors in the fintech ecosystem, big actors such as Facebook, Amazon and Google can also find huge business opportunities.
All presenters seemed to agree on the fact that banks will need to improve their value proposition to become more attractive in the eyes of the public, if they at all want to become more than plain commoditized containers.
We definitely have not even seen the beginning of the effect PSD2 will have. However, one thing is sure: it’s going to change banking forever.
Want to watch the presentations from F3 FintechAcademy? Here’s a few Youtube-links for you!
- Open Banking and Blockchain, Christoffer Andvig, CEO, BankBridge
- Open Banking and GDPR», Silje Fagerhaug, Advokat, Simonsen Vogt Wiig
- Open Banking by Sparebank 1, Knut E. Halgunset, CDO, SMN
- Open Banking by Danske Bank, Knut A. Wangen, CDO, Danske Bank
- Open Banking by DNB, Christian Løverås, Open Banking Lead, DNB
- Open Banking by EVRY, Anders Flatås, Product Manager, EVRY
- Open Payments by Telenor, Elisabeth Falck, Produktsjef API, Telenor
- Open Payments by Strex, Frode Alvad, Produktsjef, Strex
- Open Banking at Startup Weekend, Chris Sanchez, Startup Weekend Norge
Want to follow the development more closely? Here’s some influencers to follow:
- Christoffer O. Hernæs. “Chief Digital Officer in Sbanken, Norway’s first online-only bank and leading challenger bank.”
- Mike Quindazzi, “Managing Director at StrategyAnd and at PwC • EC at LAEDC • Tweets for the C-Suite #CEO #CFO #CMO #CIO #CDO#CTO #CISO on Global #Megatrends & #EmergingTech!”
- Vitalik Buterin, Creator of Ethereum.
- Kristin Moyer, “Research Vice President at Gartner/Banking & Investment Services”
- Jack Gavigan, “Fintechnologist with a background in startups, cybersecurity, trading, crypto and blockchains. COO at ZcashCo.”
- Spiros Margaris, “#VC & SA at glancepay, @datametrex, @ArbidexToken, @insurescan, @kapilendo_AG and @moneymeets_com | SA at F10_accelerator | №1 #Fintech & №2 #InsurTech by Onalytica”
- Aden Davies, “Head of Product at U Account. Tweets about technology, banks, innovation and stuff. Maker of Fintechbot.”
- Lorinda Brandon, “Proud employee at CapitalOneTech, API strategy, Open Source lover.”