Open banking in brief

Future flexible bank with open banking

SDC's Open Banking platform releases data, creates new flexibility and allows banks to enter into innovative partnerships with new fintech players.

What is open banking?

The definition of open banking varies, but most agree that open banking basically is about three things:

  • Open banking is a consequence of the general digitalization and recent years of development of a global API * economy.
  • Networks - Open banking means opening both the banks systems through APIs and the financial market as a whole, where fintech players become an integrated part of the financial ecosystem.
  • Innovation - Open banking as a new API layer on the basic banking systems can give opportunity to renewed innovation, both internally and externally to the banks. The digitalized banks of the future will be part of network economies with third parties, which via APIs will provide new, specialized financial services to the bank’s customers.

(* Application Programming Interface).

PSD2 and open banking
In addition to digitalization, the main catalyst for the open banking EU directive is PSD2. The directive opens the financial market for new players and creates increased competition by requiring banks to access third parties for payment accounts (payment initiation and data extraction).
In order for PSD2 to become compliant, it requires that banks provide APIs available for third parties, thus the first step towards open banking is already taken.

For banks that want to ensure they are also considered relevant in the future, the next natural step towards an API-based infrastructure will allow the individual banking institution to establish itself as a platform for many types of new third-party services within, for example, payments, lending, property management, etc.

How does SDC work with open banking?
In these months, SDC develops an ambitious open banking project, where the APIs are built up through the NEoS project and will be made available in line with the NEoS development.

The five most important things you should know about open banking

  1. Opens for controlled and standardized access to data and the general digitalization of the financial sector.
  2. Provides compliance with PSD2 for SDC banks.
  3. Creates the opportunity for a brand new API-based ecosystem between banks and third-party providers of financial services.
  4. Provides easier and better opportunities for banks to utilize data.
  5. Provides a scalable platform where banks can easily handle highly predictable leap in volume

When is SDC ready?
Since January 14, 2018, SDC has been ready with basic components (access control, platform, data) and APIs * for PSD2 compliance. Other parts of SDC Open Banking are expected to be delivered continuously throughout the second half of 2018.