July 30, 2021

«Open Banking», the client as owner of their data

«Open Banking», the client as owner of their data


Seven out of ten "millennials" prefer to go to the dentist than to a bank branch, according to the "Millennial Disruption Index". Technology has profoundly changed the habits and behaviors of the population in general, and of the youngest in particular. Given this daunting scenario for the financial institution, it is not strange that new players have broken into the game board of finance. The Fintech have found a real thread in this change of mentality. Thus, their effort is aimed at finding innovative solutions that facilitate access to financial services and products. This is the case, for example, of N26, which recently landed in Spain. It is literally a pocket bank, and its operation is one hundred percent mobile. Its general director in Spain, Francisco Sierra, explains that one of the main advantages is that it uses the same technology in the 17 countries of the EU where it operates. "N26 is born because its two Austrian founders are thinking about how the bank of the future should be. Thus, it begins as a mobile app taking advantage of the regulation that allowed opening bank accounts from a terminal ». And it is that N26 allows to open a bank account in just five minutes without having to make any displacement. In addition, users have a free card, with which they can withdraw cash at no cost up to five times a month. "Currently, we have exceeded 100,000 customers, but our goal is to reach one million," predicts Sierra.

N26 is just one example of the immense universe of digital finance, which will be reinforced, no doubt, with the new payment services directive, known as PSD2, which regulates all these new players and opens the door to an unstoppable trend, the "Open Banking". The new directive, PSD2, opens, precisely, the means of payment to a greater competition, so that it is more agile, easy and, above all, safer to carry out operations in the whole of the EU. The goal is to be able to offer innovative products and services, adjusted to the customer's needs and, at the same time, lower costs.

In addition, PSD2 allows the user transparent access to their own data and decide when they can be provided to third parties. In short, it states that the data belong to consumers and not to the companies that manage them, and, therefore, decide on the use they want to make with them, so the new payment directive is closely linked to the Regulation General Protection of Data (RGPD), which came into force last May. "With PSD2 it will no longer be necessary for the client to" marry "his bank and have to" divorce "each time he wants to change entity. In this way, third parties, like us, can find the best credit "partners" or the most suitable funds to offer them to our clients, "explains Sierra.

Thus, the duly authorized fintech and operators will be able to access the accounts of their clients, whenever this is requested, either to initiate payments or to consult customer information, so that, for example, all financial entities can be brought together. with which a user works in a single application. And, more and more, customers no longer want to separate channels from their bank, preferring to integrate them through different applications and tools. "What prompts the new directive is the move from centralized financial businesses to other collaborative ones," says Xavier Foz, Banking Law partner at Roca Junyent.

Although the directive had to come into force last January, the truth is that Spain has not yet been transposed. "The only thing we have is a bill, but given the government's difficulties, we are not sure if it will be carried out before the end of the year. In addition, all the development of the regulatory technical standard for secure authentication is pending, which, in theory, should take effect 18 months after its final approval, so I think we are already late », warns Foz.

Julián Díaz Santos, co-founder and CEO of Unnax -a "start-up" that offers financial applications- ensures that this delay, in addition to the fines to which Spain is exposed by the European authorities, is creating a great legal uncertainty in companies like yours, due to the different rates with which PSD2 is already being applied in the other countries of our environment, since in several states licenses have already been granted, such as Ireland or the Nordic countries. In addition, from Unnax, highlight the great technological handicap that for most traditional financial institutions is the new directive. "We are finding that, except for large banks, we do not have access to public Apis. And there is a big technological problem for entities to open their payment systems, so that third parties can take advantage, "says Jordi Pérez, also co-founder of Unnax.

Condemned to understand

Manuel Romero, director of Digital Banking in Europe at Everis, believes that the new regulations will force banks to be more innovative, especially if they want to share with Google, Amazon or Facebook, which already have a banking license. In this sense, some large banks that operate in our country, such as BBVA, have done something good about "if you can not, join them". Thus, they do not consider "Open Banking" as a confrontation between the world of physical and digital banking, but as an opportunity in an environment in which banks and fintech are condemned to understand each other. In this sense, it has launched BBVA API Market, becoming one of the first large banks in the world to bet on "Open Banking". Through the same developers, start-ups and companies will be able to launch new products and services, accessing and integrating their client's banking data in their applications. "By opening our data and services for use in commercial applications, BBVA turns 'Open Banking' into a reality, a model that will not only accelerate the transformation of the financial sector, but also seeks to favor the sector's competition and turn us into the best platform on which to develop new digital experiences, "says Derek White, global director of Customer Solutions at BBVA.

From Accenture, they warn that if banks fail to implement Open Banking, commercial models based on platforms and the strategies they allow may be lost, and may not meet the demand of consumers seeking complete digital experiences. "The '' Open Banking '' offers leading banks the opportunity to expose data, algorithms and processes through APIs and create new revenue streams, such as the successful digital giants of today," adds the consultant.

The "Open Banking" is the beginning of a much wider universe that also covers the world of insurance, and that will reach, not too long, also non-financial companies.

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