December 5, 2018

The doors to open banking have been opened… And then what? Time for first learnings

Sami Uski

Head of Business Development, Banking, Tieto

In the Nordics, a few banks now have their Open Banking platforms available, giving customers access to selected value-added services and providing test access to the account information mandated by PSD2.

The first observation of these mandated APIs for licensed Third Party Providers (TPPs) is that there is still quite a bit of work to do for banks to get ready with test access by 14th March and to be able to comply with obligations set out in the RTS Articles three months later. For example, the requirements for Strong Customer Authentication (SCA) are not fully implemented yet in many of these Open Banking platforms. Data aggregation from several banks is also an area where we see quite a bit harmonization work.

Beyond regulated APIs

Actually, the interesting part is going beyond this to the APIs the Financial Institutions – not only Account Serving Banks - want to open to their partner networks. Here we see the value of Open Banking, and the value of co-creation with your partner network for a better customer experience.

We have already worked on opening our credit solutions APIs. One example for a home buyer’s journey was presented in our Whitepaper.

The next example is consumer credit and combining API solutions so we can aggregate financial data along the journey, from the initial dream stage to creating a plan. The first step is to give an overview to the customer– not only a multi-bank transactions view for liquidity but also facts about assets owned and a valuation. Both cash flow and balance sheet. Using the same data, the customer can then give their consent to be used for automated credit scoring and a better rating without the user’s manual input of the data in an application form.

Now that we have instant payment solutions making e-commerce payments really easy, it’s nice to imagine combining credit options in a more customer-friendly way to a payment request process via APIs. Receiving a payment request to my payment app is the user flow for e-commerce payments. It’s also a good place to offer installment loans as an option for a bigger payment, or recurring credit being used as an original source of funds to an account-to-account payment.

Work in collaboration to create better customer journeys

Credit services are one thing, wealth services another. Yet another development domain is entrepreneurs and non-listed companies, and their journeys. For example, instant salary – what a great concept for an entrepreneur! In all these areas, the value is created in collaboration with many different stakeholders working to create a smooth path for the end customers. No one can create that path alone and it requires APIs opened by many – not only banks - for that purpose. These collaboration projects also require new governance structures, rule books and commercial models. But these are happening now.

We are looking forward to many interesting projects being completed and we will experience totally new multi-party service concepts utilizing Open APIs, not only Open Banking. And we are seeing great examples of the need for both ends of Open Banking. The Platform which we call the solution for opening your APIs for third party as well as the Ecosystem when the solution leverages APIs by others.

Keep an eye out for our next blog post which will dive deeper into these concrete learnings!


Blog post: PSD2: Game changer or not? Some might say that PSD2 as such will not be a huge game changer. But in fact, the impact of PSD2 goes way beyond the mandated APIs towards open banking.

Blog post: PSD2: how will it work in practice? Will PSD2 make a difference by opening up the competition and European-wide reach of banking services? Third Party Providers (TPPs) are the ones that should be benefiting from this change. Janne Hukkanen digs into how this looks from their perspective.

Whitepaper: How to make the most out of open banking. Find out what Open Banking and PSD2 mean for businesses, with concrete examples of how companies can make the most out of this new era.

Tieto Open Banking EcosystemEmbrace the opportunities created by open banking, transforming your business with innovative, agile and efficient solutions that strengthen customer relationships and increase revenue.

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