Open banking: where do we stand?

ABBL Published 28.10.2021

The last ABBL FinTech and Innovation Forum, which brings together ABBL members and innovative solution providers, focused on open banking. This term, which emerged during the drafting of the revised Payment Services Directive (PSD2), refers to an open banking system, allowing the sharing of customer financial information and data held by the bank with third parties through application programming interfaces (APIs). This data sharing allows FinTechs to offer additional services for the benefit of account users.

That’s the theory. But what about in practice today?

Ralf Ohlhausen, Chair of European Third Party Providers Association (ETPPA), gave his analysis at the Forum:

  • After many years and considerable financial investments, PSD2 still has to deliver benefits to the consumer.
  • While the availability of APIs has improved, their performance still needs to be developed.
  • Many PSD2 APIs are still not compliant, and this is two years after the final PSD2 compliance deadline of 14 September 2019, which includes strong customer authentication and account access.
  • The regulatory technical standards associated with PSD2 should be further developed to enable innovation, competition, and the technology-neutral features of PSD2.

While the industry has made good progress on the open banking ecosystem, challenges remain regarding the layers of the open finance ecosystem, including the regulatory framework and API implementation. As the ABBL, we are closely monitoring this topic and taking a proactive role in advocacy issues for our members.

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