Open Banking Apis Worldwide

Open Banking APIs Worldwide

A country-by-country guide to Open Banking APIs with analysis which regions are driving the global evolution of networked financial ecosystems. Management Summary

The ripple effects of Open Banking can now spread and important are these changes, be felt across the world. But why is it caus- that ndgit is dedicating a second white paper ing such endemic and sustainable change? to the topic. According to our analysis, key drivers are: changing customer behaviour, increasing In our first paper „Open Banking – The Glob- networking among banks, the rise of ecosys- al Revolution in Banking“, we embarked on a tems and the emergence of new supporting journey around the world by means of quali- API technologies. tative analysis - giving some broad insights on market developments across the various re- While some consider PSD2 in the EU as- syn gions. We were delighted with the consider- onymous with open banking, our findings able interest that this content piece received. clearly show that it’s really only a ‘stimulus’ to opening-up banks. To this end, similar aspira- Readers of the new whitepaper can expe- tions for Open Banking APIs are now being rience a unique country ranking model, de- seen worldwide – already touching more than veloped exclusively by ndgit. This is based on Open Banking Status 50 countries and affecting more than 10,000 four factors: the spread of Open APIs, regula- A comparison of Regulatory requirements, Standardisation Initiatives banks. tory requirements, standardisation initiatives and TPP regulation and the presence of a central TPP regulatory Open banking is reshaping the banking in- body. dustry on a local and global level. So wide-

20 20 20

ndgit’s open banking leader board 15 15

11 10 10 10 1. EU + EEA + UK 10. Malaysia 19. South Africa 2. Australia 11. Canada 20. USA 5 4 3. Hong Kong 12. Thailand 21. New Zealand 4 5 4 4 5 4. Bahrain 13. Ruanda 22. Chile 5. Japan 14. India 23. Nigeria 6. South Korea 15. Switzerland 7. Brazil 16. Indonesia yes yes early stages early planned no established planned no advanced 8. Mexico 17. China 0 developing 0 0 9. Singapore 18. Kenya Regulatory Standardisation Central TPP requirements Initiatives regulation

2 Open Banking APIs worldwide Management Summary Open Banking APIs worldwide Open Banking Status 3 Table of Introduction contents Banks are already in the midst of digital trans- support. At the same time, payments have formation. Operations and business process- been accelerated and simplified with, for es are being digitised, with paper documents example, electronic billing, contactless pay- being replaced with automated, electronic ment, Apple Pay and Google Pay. With their 1. Management Summary 2 d) Australia & New Zealand 40 options. Bank customers are also increasing- new, ultra-convenient processes, ‘first-pio- 2. Introduction 5 Australia 41 ly benefiting from new online and mobile neers’ are slowly creating new customer - ex New Zealand 42 3. What is open banking? 5 banking services. Once lengthy and unpleas- pectations. Increasing competitive pressure, e) Africa 43 Open Banking as a consequence 6 ant procedures, such as loan applications, are this is setting new standards for the financial Ruanda 44 of new value chains now handled much faster, with new features ‘experience’. Those that cannot deliver, will Kenya 44 New customer needs 7 such as digital-identity and video onboard- fall behind. The wholesale disruption of the New technologies 7 Nigeria 45 ing, verification and authentication reducing financial market – similar to that previously Competition 8 South Africa 45 time and effort. Chatbots and Robo-Advisory seen in sectors such as the media industry – is Regulatory requirements and standards 9 6. Platforms and Ecosystems 47 Services offer new levels of consultancy and already in full swing. 4. From Open Banking APIs to Ecosystems 9 7. Key Take Aways 49 Legally driven minimal approach 10 8. ndgit Open Banking Plattform 50 Banking-as-a-Service (BaaS) 11 9. Authors 50 Innovations with FinTech APIs 12 Banking Ecosystems 13 5. Open Banking APIs worldwide 14 a) Europe 20 European Union and EEA 21 United Kingdom 21 Innovators in Whatthe is OpenEU Banking? 22 Switzerland 24 b) America 25 Brazil 26 Mexico 27 Canada 27 The term open banking is currently used in two A significant evolutionary step towards this is USA 29 different ways. Some banks use open banking the second Payment Service Directive (PSD2). Chile 30 to merely publish Open APIs, so third-party Through this, the European Union is commit- providers (TPPs) can access the data. At ted to providing its banks with Open Banking c) Asia 31 ndgit, however, we believe that open bank- APIs for regulated third-party providers, start- Hong Kong 32 ing is much more than that as it also involves ing this year. The resulting PSD2 APIs can be Japan 33 opening up bank services and infrastructures seen as a precursor and important driver for South Korea 33 to TPPs allowing them to develop new inno- open banking. Bahrein 34 vative applications for their end customers Singapore 35 based on Open Banking APIs. This gives bank Thailand 36 customers the opportunity to carry out their Malaysia 37 financial business using new customer-cen- China 37 tric applications from non-banks, alongside Indonesia 38 their own bank‘s e-banking services. India 39

4 Open Banking APIs worldwide Table of contents Open Banking APIs worldwide What is Open Banking? 5 Open Banking as a consequence New customer of new value chains needs

Given these considerations, ndgit defines Many of the changes delivered through digi- vices and transactional products. This leads open banking as a value-adding business tisation are driven by shifts in user behaviour. to increasing pressure for banks to innovate model that uses Open APIs to generate new Today, customers can easily search and com- and forces them to rethink new digital offer- revenue streams. pare the most attractive and cost-effective ings. products on the market, without having to Open API’s are different from regulated PSD2 rely on their incumbent provider. Major tech- A prime example of this can be found in Chi- APIs, as banks can decide for themselves to nology groups such as Amazon and Google na, where non-banking technology groups what extent they open up their bank data are not only transforming the delivery of ser- such as Alibaba and WeChat have very suc- and processes. They form the essential basis vices industry-wide, they are using holistic cessfully created digital ecosystems that fo- for implementing future networked business processes to significantly alter customer- ex cus on linking customer-centred services models of banks with the wider ecosystem. pectation - it‘s not just about shopping any- and products. The gradual integration of pay- more. ment and finance capabilities, now provides Innovators are already offering their custom- customers with a holistic digital customer ers new customer-centred services based on In the meantime, customer-centred finan- experience, which delivers more innovative Open APIs, thereby promoting innovation cial products are being pushed out to the versions of services that were previously re- and competition in the marketplace. As indi- market by FinTech’s. These can be used- in served for banks. In this way, new entrants cated above, the key drivers of open banking dependently of the user’s bank giving them continuously supplement and substitute tra- are new customer needs, the development Customer access to a multitude of innovative apps, -ser ditional banking products. of new technologies, competitive pressure and regulatory requirements and standards. Digital Partner Below we describe the individual drivers in Distribution more detail:

Digital Partner Digital Partner Distribution Distribution New technologies

The networking of value chains, and the Bank easy set-up, scalability, configuration and emergence of new platforms which are analysis of the links. Unlike other industries, aligned to holistic customer processes, have banks are still in the construction phase of made IT-side networking a priority for all- sec this type of system. The industry-specific -re tors with API platforms and microservices quirements for safety and functionality, es- now a paradigm for the systemic connection pecially with the introduction of the PSD2, Digital Partner of various partners. pose major challenges. Services Digital Partner Services Instead of complex interfaces, easy-to-un- So far, there are only a few suppliers in the derstand and technically designed REST market, which can provide both the required Bank APIs provide easy access for a variety of part- technical and banking expertise as a whole. Products Digital Partner Services ners while API management systems ensure Open APIs place high demands on IT secu-

6 Open Banking APIs worldwide Open Banking as a consequence Open Banking APIs worldwide New customer needs 7 rity. Regulations and standards for the implementation of open banking require a wide range of complex security functions from the banking systems. While these are partly fixed, banks are Regulatory able to select some within a certain framework and are responsible for the appropriate security concept. To this end, countries such as Switzerland and Nigeria have pushed ahead with the specifications introduction of security standards for the exchange of sensitive data to simplify the implementation and use of new security technologies. and standards

Internationally, Open Banking APIs are now being created on all continents. They are ei- ther initiated by regulatory bodies, e.g. PSD2, or by market-driven standards. The aim of the regulators is twofold - to open up payments to non-banks and facilitate alternative business models; and to promote consumer protection and increase pressure on suppli- nical understanding and technical prerequi- ers to create fairer price structures. sites to become open banking providers and Competitive pressure to offer their own services to customers and The EU, Hong Kong and Australia are gov- partners. erned by regulatory requirements. Mostly, these focus on payment transactions and It’s clear that Open banking is much more Historically, banks have been more cautious petitions and Market Authority (CMA) has only a limited range of banking services. than just a „buzz word“. It marks a global and conservative in responding to market committed the nine largest UK banks to Nevertheless, they are an important corner- evolution in the financial market, which will changes. They often focus on smaller innova- implement pre-defined Open APIs to drive stone for the spread of the open banking gather increasing momentum with or with- tions such as banking apps, electronic bank competitive and innovation pressure in the philosophy. With them, banks develop tech- out regulatory requirements. statements or providing extended banking financial sector. functions of FinTech partners. However, their primary business models, products, and services have remained unchanged.

So far, they have been able to afford this type of approach due to the lack of innovative providers and competitive pressure. In markets dominated by a few banks, monopo- listic conditions have further weakened the pressure to innovate. But that is changing. New, disruptive providers of financial ser- From Open Banking APIs vices are entering the market, creating un- precedented momentum. Next generation challenger banks and FinTechs are creating to ecosystems a new competitive landscape, forcing traditional banks to create new digital services. If they don’t change, they risk losing their customer channel to third parties. For many banks, the path to open banking begins with the introduction of regulated or market-standard Open APIs, which can then be progres- sively developed in the direction of networked banking and the design of We have already seen the development of ecosystems. this type of innovation-promoting competitive landscape in the UK. Here, the Com-

8 Open Banking APIs worldwide Competitive pressure Open Banking APIs worldwide Regulatory specifications 9 Digital Partner Legally driven minimal Banking-as-a-Service Distribution approach (BaaS)

Regulated Bilateral Tipps Partners

In the EU, PSD2 demands that from Septem- AISP PISP ber 2019 banks must have PSD2 APIs to allow third-party providers to access account infor- Fintechs Portals mation and trigger payments. While it pro - vides a set of requirements, it leaves enough scope for individual markets to define the in -

Digital Partner terfaces themselves. To make the task easier Distribution for banks and to avoid a jumble of thousands APP APP of individual solutions, various standardisation bodies have emerged. One of these Acc is The Berlin Group, whose framework has Loans become the leading standard for PSD2 and ounts Client which, according to the European Banking Assets Data AISP PISP Association, is now used by 78% of EU banks.1 The next generation of open banking models Open will further extend open banking services to Banking For thousands of banks, the regulated intro- enable third-party services and products to Platform duction of PSD2 APIs represents the starting be released enabling TPPs to service custom- point of API banking. Other international ers with integrated and networked banking PSD2 financial markets already have comparable services known as value-added services. API regulations and market standards for PSD2-

AIS PIS like Open APIs for third-party providers. To As a rule, they use API platforms - similar to ensure their long-term competitiveness, a marketplace - to deliver a set of bank func- many future-oriented financial institutions tions. These banking APIs go well beyond Open already rely on the extensible base technol- the PSD2-like open banking APIs and open Banking ogy of API platforms when implementing banks in all product areas, such as accounts, Platform PSD2 APIs. This makes it quick and easy to investment products or credit processes. This upgrade to open banking. enables new digital service providers to network their applications and value chains with banks’ services, data and infrastructures. In this way, external third-party vendors become new channels between the bank and the customer, thereby scaling the reach of the bank.

With white-label banking, APIs allow banks, channel. In turn, third-party vendors can flex- B2B organisations and digital partners to ac- ibly serve existing customers from their own cess products and individual processes and and their partners’ products to create added API platforms provide the scalable deploy- value. ment of white-label accounts or depots. In this way, banks can provide the required banking In Switzerland, for example, customers of licenses, compliance and risk management the TPP ‘neon’ will automatically also be- experience, and generate new attractive rev- come customers of the supporting bank, Hy- enue streams in an expanded distribution pothekarbank Lenzburg. 1 Source: EZB survey: https://www.moneytoday.ch/news/berlin-group-und-der-weg-zur-psd3/

10 Open Banking APIs worldwide minimal approach Open Banking APIs worldwide Banking-as-a-Service 11 Innovations with Banking a new type of experience for the customer – Digital Partner similar to a smartphone App Store. Custom- fintech apis Distribution Ecosystems ers can choose which partner functions they want and, depending on the agreement of the two partners, these white label services are delivered under the brand umbrella of Ecosystems are the last development stage the bank or reveal themselves as their own Some banks are already employing FinTech of open banking. With their help, banks can brand. This type of ecosystem, will finally -re innovations and partner modules in their differentiate themselves from their compet- alise the so-called platform economy, where end-user applications. In particular, to cov- itors by being able to offer affiliated partner the bank becomes the navigator for all on- er functions that they would only be able APP services to specific customer target groups. line financial services for the customer. to offer with great effort, such as account Complementing their own digital offerings aggregation, financial management -or ro to create comprehensive end-to-end finan- They are the expression of value chains in bo-advisory. Increasingly, these services are cial services with holistic customer-centred which the bank no longer offers its own ser- Fintech based on PSD2-regulated account access Hub processes. In addition, they can use these to vices, but networks with third-party products with which data from any third-party banks innovative non-banking services and build and services via banking APIs. of the customer can be included. Easy access is made possible by quickly and flexibly- inte grable APIs. Open Consequently, these modules are rapidly -be Banking coming essential building blocks of banks’ Platform Digital Partner Distribution new digital strategies and customer jour- neys. Customer-centric applications with -in XS2A Score Rate Sign novative sub-features can now be developed faster and more flexibly, keeping the bank on par with innovators. Imagine fully digitised credit processes with access to third-party accounts, financial analysis, credit history, and digital signatures that seamlessly accel- E-Banking erate the user from application to approved Lending Invest- ment credit - all via FinTechs and powered by APIs. Finance App Store Beyond Alternatively, banks with PSD2-based ac- Manage- Banking ment count access can also reuse their own com- Partner Ecosystem plex services and offer them, via licensing Acc Repor- models, to digital partners. Examples include ounts ting customer ratings, onboarding or real estate and property valuations. This allows the - ex Clients Assets clusive knowledge contained within special- ized departments to be scaled, shared and Open monetized across a broader target group. Banking Platform

12 Open Banking APIs worldwide Innovations 13 UK and Australian regulations are the most Open Banking developed in terms of content. The UK Open Banking Standard went live with the CMA9 banks as early as 2018 and subsequently in- APIs worldwide spired regulators and others worldwide. In Australia and Mexico. The most widely used standard is now the NextGenPSD2 of the Ber- Pioneer lin Group, which is used by a majority of banks The opening up of the banking market - by islation is being developed and more than in the 28 EU countries. It is based on the ex- Follower regulators on the one hand and market stan- ten others where market standards for open perience with the FinTS standard for account Converter dards on the other - is constantly advancing banking are being worked on. access and payment initiation services, which worldwide and already extends to more than was established 20 years earlier and is still Riser 50 countries. Outside the EU countries, there While the EU has been responsible for most used by most German banks. are currently six more markets where leg- of the current regulatory requirements, the Beginner

Canada

Iceland Norway

EU / UK EWR Lichten- USA stein China

Schweiz Hong Japan Kong

Mexico

India Thailand Kenya Nigeria Singapore

Chile Malaysia Brazil Ruanda

Indonesia South Africa

Australia

New Zealand

14 Open Banking APIs worldwide Open Banking APIs worldwide Open Banking APIs worldwide 15 Open Banking APIs Regulators A comparison of markets and countries Africa 5

Australia & New Zealand 50

Asia 33

America 31

Europe 97 Open Banking Status 0 10 20 3040 50 60 70 80 90 100

Africa 10 Market Standards Australia & New Zealand 48

Asia 39 Africa 25

Australia & America 27 New Zealand 63

Europe 97 Asia 63

0 10 20 3040 50 60 70 80 90 100 America 25

Europe 99

0 10 20 3040 50 60 70 80 90 100

Distribution TPP-Regulation

Africa 16 Africa 0

Australia & 40 Australia & New Zealand New Zealand 50

Asia 46 Asia 28

America 25 America 13

Europe 98 Europe 97

0 10 20 3040 50 60 70 80 90 100 0 10 20 3040 50 60 70 80 90 100

16 Open Banking APIs worldwide A comparison of markets and countries Open Banking APIs worldwide A comparison of markets and countries 17 Market research Global Status of results in detail Open APIs

70 70 70 ndgit carried out global market research to In our overall ranking, the UK and Australia, identify the proliferation of Open Banking together with the 28 EU countries, are Pio- 63 % 60 60 63 % 60 APIs, the existence of regulatory requirements neers (1) and considered to be the ‘front run- and market driven initiatives, third-party -reg ners’ of Open Banking. Japan, Hong Kong, 50 50 50 ulations, and the scope of Open APIs offered. South Korea, Bahrain and Brazil are classed as In case of the absence of API standards, we Followers (2). Among the mid-field Convert- 40 46 % 40 40 have focused on Open APIs provided by ers (3) are Mexico, Singapore, Malaysia, Cana- banks. da and Thailand. While up and coming Risers 21 % 30 21 % 30 21 % 30 (4) are Switzerland, India, Indonesia, China 17 % 17 % 17 % 17 % From our findings, we have divided eachand Rwanda. According to our analysis, those 20 20 20 country’s Open Banking aspirations into five at the earliest stages, Beginners (5), are repre- groups: sented by the US, New Zealand, Chile, Nigeria, 10 10 10 Kenya. yes yes early stages early planned no established planned no advanced 0 developing 0 0 Pioneer Our observations identified the following Heavily regulated Open Banking market conditions: API prescribed Standardisation TPPs by regulatory Initiatives present regulated Follower – Legal regulations exist in the European Weaker regulated Open Banking Union, the United Kingdom, Australia, Bah- rain and Hong Kong. Converter Stronger market standards – Regulations were at least announced in another half-dozen countries. Riser Weaker market standards – Most widely used are Open Banking APIs in the European Union, UK, Singapore, Australia, Beginner Hong Kong, Japan and Malaysia. First Initiatives – There are currently just four countries with central regulatory bodies for TPPs.

Overall, we detected signs of active initiatives in 87% of all countries analysed. Which leads us to the conclusion that Open Banking is a 87% global phenomenon! active initiatives of all countries analysed

18 Open Banking APIs worldwide Market research results Open Banking APIs worldwide Market research results 19 European Europe Union and 98 99 97 97 97 EEA 100

With its PSD2 legislation, the European Union 90 is a clear Pioneer (1) in the widespread intro- All countries in the EU and the European Eco- is a member of the EU, UK banks will be reduction of Open Banking. PSD2 covers the 80 nomic Area - which includes Norway, Iceland quired to comply with PSD2 and only allow regulation of third-party service providers as and Liechtenstein - must implement PSD2 registered TPPs to access their PSD2 APIs. 70 well as the requirements for a standard. and, in the process, transfer sovereignty over Large parts of the PSD2 requirements are very

60 the bank data to their customers. At the similar to those of the CMA and some - like ac- Within the EU, however, there are significant same time, third-party service providers who cess control for TPPS – are identical. So it can differences in the progress of implementation 50 want to access account data or initiate pay- be assumed that even after Brexit, PSD2-like and cooperation between banks and FinTechs ments must also be regulated. Under PSD2, specifications will remain. It is also expected 40 via Open APIs. Of particular note, and there - as of September 2019, over 5,000 European that the CMA‘s mandate will be extended to fore worthy of separate consideration, is the 30 banks must provide access to account infor- the remaining UK-based banks. UK and the implementation of the UK Open mation and payment initiation via Open APIs. Banking APIs by the CMA9 banks. In contrast, 20 Safety guidelines for this have been set with The UK has perhaps the most intense bank- Switzerland does not follow the PSD2 regula- the Regulatory Technical Standards (RTS) of ing market internationally with strong com- 10 tion and relies on the emergence of market the European Banking Association (EBA) but petition from traditional banks, challenger Open Banking Status Open Banking Distribution Standards Market Regulators TPP-Regulation standards that are gradually spreading. 0 the market has been left to design its own banks and FinTechs. Due to the resulting open interfaces. To this end, several Europe- high level of innovation, the number of banks an working groups have been developing API that already offer open interfaces today is the standards. Among the most successful is the highest worldwide. Berlin Group. Covering 78% of all European banks, its framework provides the most widely used standard, followed by UK Open Bank- ing and STET.

A comparison of the standards, and the reasons for Berlin Group’s rapid rise, can be found in our white paper „Berlin Group - Develop- ment, Features, Outlook“.

Spotlight: United Kingdom Example: Starling Bank The UK is considered the principle Pioneer (1) The Starling Bank already in the introduction of Open Banking. From has its own API marketplace, January 2018, its Competition and Markets offering FinTechs innovative Authority (CMA) mandated country’s nine services beyond its Open APIs largest banks (CMA9), to provide standardised in categories such as account Open APIs. This gave the UK much earlier reg- aggregation, personal finance ulation than any other market. The CMA-ini- management, insurance, peer- tiated Open Banking Implementation Entity to-peer investments, savings and (OBIE) defined the APIs within the UK Open mortgages. Banking Standard. Although this had to be extended to include individual PSD2 requirements, it also covers areas such as credit data not regulated by the PSD2. As long as the UK

20 Open Banking APIs worldwide Europe Open Banking APIs worldwide European Union and EEA 21 hub, which now serves more than 25 ban- 78% king groups. The hub will take API functiona- of all European banks Example: Nordea lity beyond the scope of PSD2 e.g. to savings provides the most Nordea already maintains a products, loans and real estate finance. widely used standard developer portal with Open APIs for Account Information Other countries, like Portugal, Luxembourg Services, Domestic Payments, and Italy, have formed hubs that are based and SEPA Transfers. Account on the standard of the Berlin Group and services for corporate make FinTechs easier to integrate. In Portu- customers are also under gal, SIBS covers about 95% of the market. In development. Italy, the bank-based Interbank Association for Corporate Banking founded the Globe Hub. Overview UK

Score ...... 100/100 Status ...... Pioneer (1) Open APIs ...... Very common Regulator ...... Yes Initiatives ...... Advanced TPP regulation ...... Yes

Innovators in the EU

Within the European Union, Germany, Spain have operated in a legal but grey area, sup- and the Nordics are considered, from sever- plying more than 800 FinTechs. The intro- al perspectives, to be particularly innovative duction of PSD2 has provided greater legal in the field of Open Banking. This includes clarity on the part of the third-party service the emergence of ‘hubs’, that centralise the providers as well as a reduction of supported Overview EU / EWR delivery of APIs through a single vendor, the- use cases. reby making integration much easier for Fin - Techs. The Nordics are considered leaders in digital banking and are now extending their innova- Score ...... 100/100 Germany was the first country to provide in - tion into Open Banking. A number of banks Status ...... Pioneer (1) terfaces and APIs for account access. Since already offer Open APIs today and provide Open APIs ...... Very common 1998, FinTS has provided a functional spec - access to account information. Regulator ...... Yes trum that has been well beyond the scope Initiatives ...... Advanced of PSD2, for example, ensuring custody ac - TPP regulation ...... Yes count data is provided by almost all German Spain was recently named a pioneer in digi- banks. Since 2016, against this backdrop, a tal banking in an analysis by Oliver Wyman. broad range of local account aggregators As part of PSD2, Redsys has launched its own

22 Open Banking APIs worldwide Innovators in the EU Open Banking APIs worldwide Innovators in the EU 23 Switzerland 40 Example: ecosystem of Americas Although legendary for its banking land- Hypothekarbank Lenzburg 31 scape, Switzerland can be ranked as a Riser Recognised with several innovation awards, the (4) in the realms of Open Banking. This is due The development of Open Banking within 27 to the fact that both the Swiss Bankers Asso- Hypothekarbank Lenzburg the American continent differs greatly from 30 ciation and the authorities reject legal regu- ecosystem has enabled one region to another: While the US is char- 25 25 lation for opening bank data. multidimensional business acterised by a large number of challenger models using the ndgit API banks and FinTechs with very broad digital Therefore, Open APIs in Switzerland are driv- platform. Through its Open offerings, the development of Open Banking en by the market itself. But there are some Banking APIs, innovative start-ups APIs tends to be championed by countries 20 market bodies working on public standards such as neon consume white- like Mexico and Brazil. 13 for banking APIs. This includes the industry label products to launch services association Swiss FinTech Innovations (SFTI) directly to their customers. In Other South American countries, however, re- which, together with the system providers addition, banking customers can main Beginners (5), while Canada, as a Con- Avaloq, Finnova, Temenos, Finstar and ndgit, benefit from an ecosystem of verter (3), shows clear signs of having a rapidly are designing the Common API. OpenBank- FinTech partners, that can use emerging open market. 10 ingProject.ch is also planning an Open API their data via Open APIs to deliver for Swiss payments. In addition, SwissCorpo- value-added services. rate API, an interface standard and hub for business customers, is also planning to go TPP-Regulation Standards Market Regulators Distribution Status Open Banking live this year, and will be supported by major 0 Swiss banks.

As of today, only Hypothekarbank Lenzburg offers Open Banking APIs in Switzerland via Overview a developer portal which has been success- Switzerland fully used by various FinTechs since 2018. Similar to PSD2, these APIs support account information and payment initiation but also Score ...... 13,5/100 take into account local Swiss characteristics. Status ...... Riser (4) Open APIs ...... Some Regulator ...... No Initiatives ...... Established TPP regulation ...... No

24 Open Banking APIs worldwide Switzerland Open Banking APIs worldwide America 25 Brazil Mexico

Brazil is one of the world’s Open Banking Mexico is ranked as an Open Banking Con- Followers (2). It already has some open APIs verter (3) and lies mid-field in terms of the provided by banks and these cover a relative- region’s other players. The introduction of ly broad range of services. In April, the central Example: Banco Brasil FinTechLaw, in March 2018, made it the first Overview Mexico bank also announced the main guidelines for Banco Brasil already provides country in Latin America to regulate the fin- the regulation of Open Banking but the exact a third-party developer portal tech market. Similar to the CMA’s approach model is still being discussed. with sandboxes. Included are in the UK, this law not only promotes greater Score ...... 38,5/100 account information, credit protection of consumer data but also fosters Status ...... Converter (3) By 2020, it will oblige all banks to open up to card, investment, and payment competition, thereby increasing the pressure Open APIs ...... Some spread third-party providers in a multi-stage process. functions. on local banks to innovate. In addition to reg- Regulator ...... Planned In addition to account access functions and ulation of FinTech companies in the market, Initiatives ...... Early stage payment triggers, it will include locations of it also makes the introduction of Open APIs TPP regulation ...... Planned service points, loans and customer data with- mandatory. in its guidelines. As with the UK, it’s aiming beyond the demands of Europe’s PSD2. How- Some features , such as the Customer Con- ever, a third-party regulatory body is currently sent model and the Regulatory Sandbox, are not planned. coming directly from the UK Open Banking Standard. Currently, an API standard does not yet exist but, given these developments, it can be assumed its scope will be based on the UK Open Banking Standard.

Overview Brazil Canada

Score ...... 39,5/100 Canada is also classified as a Converter (3) in Status ...... Follower (2) Open Banking. Currently, RBC is the only local Open APIs ...... Widely used bank that offers third-party vendors access to Regulator ...... Planned Open APIs through a developer portal. Its use Initiatives ...... Early stage cases differ greatly from those required by TPP regulation ...... No PSD2.

Although the country does not have an over- arching and legally required Open Banking standard, there are banking and regulatory efforts to design an API standard. The Depart- ment of Finance convened an Open Banking consultancy committee in 2018 which resulted in the January 2019 publication of the Re- view into the Merits of Open Banking, whose

26 Open Banking APIs worldwide Brazil Open Banking APIs worldwide Mexico 27 aim was to help derive a comprehensive Open USA Banking strategy for the whole country.

It’s certain that this will include the strength- Example: Royal Bank Despite its many existing digital players, the ening of user rights through a customer-con- of Canada (RBC) US remains an Open Banking Beginner (5). sent model for data transfer, risk minimisation In 2018, the RBC was the first None of its states has a legally prescribed through common security standards and the Bank in Canada to provide an Open Banking regulation. Instead, the mar- Overview USA relevance of data-sharing policies in the con- API developer portal. The portal ket itself is driving efforts to roll out Open text of Open Banking. comprises five API packages APIs across the board. Individual banks now with end-to-end business provide APIs on their developer portals. How- Score ...... 8,5/100 processes for the following use ever, most continue to rely on bilaterally used Status ...... Beginner (5) cases: credit card catalogue; APIs in collaboration with FinTechs. Open APIs ...... Some spread settlement finder; amortisation, Regulator ...... No minimum deposit rate and In 2017, the National Automated Clearing- Initiatives ...... Early stage vault deposit calculators. house Association (NACHA), in collaboration TPP regulation ...... No with the API Standardization Industry Group (ASIG), announced the development of several API Use Cases. In July 2018, together with the IFX Forum (now Afinis), they published an implementation concept for RESTful APIs. Afinis continues to explore the definition of banks, the US could be considered as a leader standardized APIs - for transaction status re- in digital banking. However, with no current trieval, B2B billing interoperability, and pay- legally binding requirements for Open Bank- ment initiation - and has already deployed a ing, its development remains strongly linked sandbox including a developer portal. to the readiness of banks to open their data for third-party providers. This has resulted in With its wide range of FinTech offerings, as its downgrading in our assessment and sub- well as the large number of new challenger sequent ranking.

Overview Canada

Score ...... 21/100 Status ...... Converter (3) Open APIs ...... Some spread Regulator ...... No Initiatives ...... Early stage TPP regulation ...... No

28 Open Banking APIs worldwide Canada Open Banking APIs worldwide USA 29 Chile Asia 63 70 With its current Open Banking development, Chile is lagging behind the Latin American 60 pioneers Brazil and Mexico and is among the Within Asia, the Open Banking progress of 46 Beginners (5) in international comparison. Overview Chile each market is very different. The introduc- Currently, only Banco BCI has an Open Bank- tion of Open APIs is being promoted at the 50 ing platform. local level, which significantly increases the Score ...... 8,5/100 risk of fragmentation compared to Europe 39 40 Together with fintech group FinTechile, it is Status ...... Beginner (5) or other regions that embrace trans-national 33 also trying to drive a nationwide Open Bank- Open APIs ...... Some spread Open Banking initiatives. 28 ing strategy. This would aim to position Chile Regulator ...... No 30 as a Latin American Open Banking pioneer by Initiatives ...... Early stage actively initiating cooperation between banks TPP regulation ...... No and FinTechs. 20

TPP-Regulation Standards Market Regulators Distribution Status Open Banking 0

Example: Banco BCI In 2017, Banco BCI was the first and only one on the market to launch its own API portal, providing a selection of third-party APIs covering branches, ATM localisation, loans, mortgages, account access, benefits such as discounts and promotions and daily economic indicators. The BCI contributes positively to financial inclusion through its open portal and the resulting digital solutions.

30 Open Banking APIs worldwide Chile Open Banking APIs worldwide Asia 31 Hong Kong Japan

Although Hong Kong is clearly a pioneer in Like Hong Kong, Japan is one of the Follow- the Legislation on Electronic Payment Inter- Asia Open Banking, in the international con- ers (2) in the field of Open APIs. Here, too, we mediate Service Providers. These provisions text, we have ranked it as a Follower (2). To- found various Open Banking services provid- cover the introduction of a Financial Services day, its range of Open Banking APIs is very Overview ed by banks, which will continue to increase Authority (FSA) registration system and the large, with many delivering a much higher until 2020 through regulatory measures. At monitoring of registered FinTechs, as well as level of service than PSD2 prescribed APIs. In Hong Kong the same time, there is full regulation of TTPs requirements for promoting cooperation be- early 2018, the Hong Kong Monetary Author- on the market, as well as other initiatives to tween banks and FinTechs. In March 2019, 40 ity (HKMA), which is the national regulator, create a common Open API standard. TPPs were already registered in Japan. released an Open API Framework. It includes Score ...... 80,5/100 functionality and deployment time for APIs; Status ...... Follower (2) In 2017, the Japan Banking Association (JBA) architectural standards, security and scope Open APIs ...... Widely used was commissioned via the ‘Promotion of of the Open APIs; a third-party control mod- Regulator ...... Yes Open Innovation’ report to make recommen- el; and Open API support and development. Initiatives ...... Established dations that included an API standard for TPP regulation ...... Planned Open Banking as well as an API Connection In a four-phase model, banks will provide List to help banks familiarise themselves with product information (Phase 1), customer Open APIs and give guidance on evaluating onboarding (Phase 2), account information third-party APIs. (Phase 3), and payment initiation services (Phase 4) through Open APIs. The framework As an amendment to the Banking Act, which Overview Japan is influenced by both PSD2 and UK Open came into force on 1 June 2018, it released Banking, but is unique in its overall form. In Hong Kong the movement is referred to be- Score ...... 63/100 ing the initial step in the „new era of smart Status ...... Follower (2) banking“. Open APIs ...... Widely used Regulator ...... No Initiatives ...... Advanced TPP regulation ...... Yes

South Korea

In South Korea, there have been strong efforts in Open Banking since 2016. At that time, the Financial Services Commission (FSC) initiated the FinTech Open Platform. Forty financial institutions, including 16 banks, supported the initiative, which allowed FinTechs to access Open APIs through a common inter- Example: Standard Chartered face, but at a comparatively high cost. The In 2017, Standard Chartered introduced a developer portal, which now has South Korean government believed these over 100 APIs for Hong Kong, South Korea, UK, France and Germany. There conditions were inhibiting market growth so are currently 8 APIs available in Hong Kong covering Product Information, began developing a framework for nation- Customer Onboarding for Loans, ATM Localization and FX Rates. wide Open Banking that would ensure low costs for market participants. It adopted the Financial Innovation Support Act and intro-

32 Open Banking APIs worldwide Hong Kong Open Banking APIs worldwide Japan 33 duced a Regulatory Sandbox in March 2019. Singapore In parallel, the FSC provided frameworks for Open Banking under the Electronic Fi- Overview South nancial Transaction Act: standardised Open Singapore has experienced the widespread Korea Banking APIs and third-party regulation. By use of Open Banking APIs, with many banks October 2019, a central API standard should offering them nationwide. However, in our also be defined. This activity has propelled comparison it falls short of a being a Follow- Overview Singapore Score ...... 59,5/100 South Korea to a leadership role within of er and is ranked as a Converter (3) due to its Status ...... Follower (2) the Asian Open Banking movement and is lack of legal guidelines. Open APIs ...... Very little reflected in its position as Follower (2) in our Regulator ...... Planned international comparison. The largest bank in Singapore, the DBS Score ...... 31,5/100 Initiatives ...... Fortgeschritten Group Holding, published its platform in Status ...... Converter (3) TPP regulation ...... Planned 2017 and, with its Open API Offering, is con- Open APIs ...... Widely used sidered to be an absolute pioneer worldwide. Regulator ...... No While the implementation of open interfac- Initiatives ...... Established es in Singapore is not mandatory, there are TPP regulation ...... No government-led initiatives to introduce standards. The Monetary Authority Singapore (MAS), in cooperation with the Association of Banks in Singapore (ABS), launched an API Playbook in 2016, which provides an overview Bahrain of 411 recommended APIs covering more than 700 business processes. It includes APIs for banks, insurance companies, asset man- In the Arab world, Dubai and Abu Dhabi are agement and government organisations. beginning their efforts to open the banks, Adoption of the recommendations is volun- but only Bahrain is showing a sustainable de- tary, however, it has been well received and velopment towards Open Banking. Thanks interest in the market is great. to these developments, the state can be classed as a Follower (2). In November 2018, In early 2017, the MAS also launched the Example: DBS Group the Bahraini Central Bank adopted the regu- AFIN, a FinTech innovation network, involv- The DBS refers to its latory framework Open Banking Modules for ing the International Finance Corporation platform, launched in 2017, banks and TPPs in payments. Retail banks (IFC) and the Bankers Association. Part of its as „the largest API Developer were given a tight deadline and had to sub- remit includes providing a sandbox to facil- platform in the world“. mit implementation plans by January 2019. itate service development between banks From the beginning 155 and FinTechs. APIs were available, which The Open Banking Module defines both Overview Bahrain made it possible to integrate the interfaces and the requirements for the innovative functionalities technical standards of Strong Customer such as real-time payments. Authentication (SCA) and Common Secure Score ...... 67/100 In 2018, DBS added to this Communication (CSC). It is based in the Status ...... Follower (2) with the launch of various broadest sense on PSD2 but goes beyond Open APIs ...... Very little marketplaces including a it with a requirement for 3-factor authenti- Regulator ...... Yes real estate marketplace, a car cation. The catalogue of measures, with its Initiatives ...... Developing marketplace and an electricity clear sanctions for failure to meet deadlines TPP regulation ...... No marketplace. or requirements, also shows how serious the Kingdom is about advancing and benefiting from Open Banking. 2017 in this year the MAS also launched the AFIN 34 Open Banking APIs worldwide Bahrain Open Banking APIs worldwide Singapore 35 Thailand Malaysia

We have classed Thailand as a Converter (3). Malaysia‘s Open Banking development clas- Overview Malaysia Although there is no legal regulation at pres- sifies it as a Converter (3). The emergence of ent, the three big banks have already pro- Open APIs is primarily driven by the govern- vided developer portals with Open Banking Example: Siam Commercial ment and is now well advanced with various Score ...... 30,5/100 APIs. These include Siam Commercial Bank, Bank (SCB) banks already providing open interfaces and Status ...... Converter (3) Kasikorn Bank and Bangkog Bank. The scope Siam Commercial Bank a planned central registry for TPPs. Since 2015, Open APIs ...... Widely used of the interfaces provided differs significantly relies on ecosystems with banks have used a joint FinTech incubator Regulator ...... No from the services required under PSD2. digital partners and FinTechs. programme to self-initiated Open Banking. In Initiatives ...... Established Together with the Mall Group, June 2016, the Central Bank of Malaysia and TPP regulation ...... Planned In December 2015, the government launched it has launched a range of the regulator Bank Negara Malaysia (BNM) the Thailand 4.0 drive project. As part of new services. It also offers jointly launched the Financial Technology En- this, the central bank called Bank of Thai- Open Banking APIs for loans, abler Group. land (BOT) provided a regulatory sandbox payments and customer in 2016, enabling emerging FinTechs to test information in its developer Supporting regulatory policies for Open their services. One year later, the country’s portal. Banking, this created a regulatory sandbox Securities and Exchange Commission (SEC), base, which was launched in 2017. launched additional sandboxing on topics ary 2019, it released API specifications, which such as collateral, derivatives, clearing hous- In 2018, the Central Bank of Malaysia initiated included scope, deadlines and recommen- es and e-commerce. the Open API Implementation Group to de- dations for standardisation and the planned velop standards and regulate TPPs. In Janu- regulation of TTPs. In 2018, they released an API portal, with access to product information, exchange rates, and more.

In China Open China Banking is heavily followed by Tecent‘s WeBank (WeChat) Despite its pioneering role in other techni- and Ant Financial cal disciplines, China is lagging behind in its (Alibaba). Overview Thailand Open Banking development and so has been ranked as a Riser (4). Open Banking is heavily followed by Tecent‘s WeBank (WeChat) and Score ...... 19,5/100 Ant Financial (Alibaba). Status ...... Converter (3) Open APIs ...... Some In March 2019, Tecent and WeBank an- Regulator ...... No nounced the implementation of a new driven by PSD2 and other regulations proba- Initiatives ...... Established FinTech Research Lab with the goal of de- bly by the influence of tech giants. TPP regulation ...... No veloping an Open Banking Framework to support banks in Open Banking implemen- So far, the country’s financial services and tation. Where Chinese banks currently offer data protection regulation has been limited Open APIs, the range is bigger than those but privacy guidelines, based on GDPR, are

36 Open Banking APIs worldwide Thailand Open Banking APIs worldwide Malaysia 37 now in planning. Nonetheless, there are still India no concrete plans for an Open Banking regulation, so the emergence of Open APIs will Overview China continue to be driven by market participants India also has the status of Riser (4). Despite and customer needs. the absence of regulatory requirements, banks have already implemented Open Score ...... 11/100 Banking APIs. Disclosed interfaces main- Overview India Status ...... Riser (4) ly cover payment initiation and loans ser- Open APIs ...... Very little vices. A central TPP register is currently not Regulator ...... No planned and initiatives for Open Banking Initiatives ...... Developing have so far been driven mainly by banks. Score ...... 14,5/100 TPP regulation ...... No Status ...... Riser (4) For example, YES Bank, RBL, DCB, Kotak and Open APIs ...... Relatively strong the Federal Bank have already implement- Regulator ...... No ed Open API platforms, increasing pressure Initiatives ...... Early stage on other local banks to follow suit. TPP regulation ...... No

Indonesia

Indonesia has not published any regulatory guidelines so far. That said, thanks to current bank and government initiatives, the coun- Overview Indonesia try is still ranked as a Riser (4). Some banks Example: DCB Bank already offer Open Banking APIs through In February this year, DCB Bank announced the launch of its developer portal. developer portals, giving FinTechs access to Score ...... 13,5/100 Together with its own APIs, this is enabling more than 20 third-party providers to offer their data and affiliate ecosystem partners. Status ...... Riser (4) its innovative and customer-centric products. Use cases include PAN verifications, Open APIs ...... Very little account and customer inquiries, fund transfers and remittances. In December 2016, the Bank Sentral Repub- Regulator ...... No lik (BSR) set up the FinTech Office to moni- Initiatives ...... Developing tor FinTechs and serve as a consultancy for TPP regulation ...... Planned them. Recently it announced the establish- ment of a Regulatory Sandbox. At the time of publishing this paper, this had not been launched. developer portal with 19 APIs that could serve as the basis for further standardisation initia- In 2017, the Bank of Central Asia released its tives.

Example: Madiri Bank As early as 2015, Madiri Bank made an API available, which gives third-party providers access to its electronic money system. It also helped building FinTech and third-party partnerships that provide online payment system services e.g. Cashlez.

38 Open Banking APIs worldwide Indonesia Open Banking APIs worldwide India 39 70 Australia & 63 Australia 60 50 50 Australia is one of the new Pioneers (1) in New Zealand 48 Open Banking, as it has both a set of rules for 50 opening bank data and a central regulator of 40 TPPs. However the Open Banking coverage Overview Australia in the market is still relatively low. It’s worth 40 noting that the requirements of Australia’s Although geographically close together, Aus- Open API based services is much larger than tralia and New Zealand could not be more those of PSD2. Score ...... 88/100 different in their Open Banking development. 30 Status ...... Pioneer (1) Australia is one of the top countries in our As with PSD2, Australian regulators see data Open APIs ...... Relatively strong ranking, while New Zealand, together with sovereignty in the hands of consumers. This Regulator ...... Yes the USA, Kenya, Nigeria, Chile and South -Afri 20 data sovereignty is not regulated in a dedi- Initiatives ...... Advanced ca, is at the back of the pack. cated Payment Directive, but in the Data TPP regulation ...... Yes Protection Act called Consumer Data Right t. 10 Specifically, the law provides that consumers themselves can decide which of their accu- mulated data to share and with which out- TPP-Regulation Standards Market Regulators Distribution Status Open Banking 0 side party. The banking sector is only the first industry in which the law will take effect. It also foresees the introduction of Open APIs Scope of Required Services*1 into other sectors and will be extended to Savings accounts them in due course. Call accounts Term deposits By July 1, 2019, the four largest banks in Aus- Current accounts tralia had to provide Open APIs on credit and Cheque accounts debit cards, prepayment and transaction Debit card accounts data as part of a pilot test. Within 12 months Transaction accounts all banks should follow their lead and provide Personal basic accounts the full planned functionality. GST and tax accounts Cash management accounts Farm management accounts Pensioner deeming accounts Mortgages Business finance Personal loans Lines of credit Overdrafts Consumer leases Credit and charge cards Asset finance and leases Mortgage offset accounts Trust accounts Retirement savings accounts Foreign currency accounts

*1 Source: finder.com.au/open-banking

40 Open Banking APIs worldwide Australia & New Zealand Open Banking APIs worldwide Australia 41 New Zealand Africa New Zealand is one of the Beginners (5) in Last year, this community worked on a com- Open Banking. Only the Bank of New Zea- mon Open Banking API and ecosystem 30 land (BNZ) currently provides Open Banking standard that would simplify cooperation Overall, Africa is one of the Beginners (5) in 25 APIs, which are currently limited to payment between different organisations and pro- the field of Open Banking although isolated initiation. In New Zealand, the Open Bank- mote innovation in the financial sector. initiatives can be seen in the market. Due to ing movement is driven primarily by the a high proportion of its population having no government Payments NZ. In March 2018, The standard is expected to be based on UK access to financial systems and its relatively it launched an API pilot programme to test Open Banking of the Open Banking Imple- weak infrastructure, Africa’s digital service Open Banking APIs with account informa- mentation Entity (OBIE). At time of publica- development is primarily focused on finan- 20 tion and payment services. Six banks and tion of this paper, the standard was not yet cial inclusion. Telecommunications providers 16 third-party vendors participated in the test: published. such as M-Pesa have had a lot of influence on ASB, BNZ, Datacom, Paymark, Trade Me and the digital banking market. They are increa- Westpac. sing the pressure on banks to innovate their services through digital payment offerings. 10 0

M-Pesa not only offers users the ability to 10 upload funds to the SIM card in order to make payments, but also allows employers 5 Overview New Zealand to pay directly to their employees phones. In 2018 M-Pesa already had 27 million customers in 10 countries. TPP-Regulation Market Standards Market Regulators Distribution Status Open Banking Score ...... 8,5/100 0 Status ...... Beginner (5) Open APIs ...... Very little Regulator ...... No Initiatives ...... Early stage TPP regulation ...... No

42 Open Banking APIs worldwide New Zealand Open Banking APIs worldwide Africa 43 Ruanda Nigeria

Despite the current absence of Open Bank- In terms of open interfaces, Nigeria is also ing portals in the market, Rwanda has an- among the Beginners (5). Its Open Banking nounced regulatory efforts and can be development - like in Switzerland - is mainly classed as a Riser (4) in Open Banking. In Overview Ruanda driven by market participants. To this end, a Overview Nigeria contrast to other African countries, the whole range of companies, including the Ster- Rwanda Payment System Strategy which ling Bank and the Open Technology Founda- was launched by the Banque Nationale du Score ...... 15/100 tion (OTF), are helping to create a standard for Score ...... 8,5/100 Rwanda (BNR) in 2018, already provides a Status ...... Riser (4) the country and recently signed a Memoran- Status ...... Beginner (5) regulatory system. It is strongly based on Open APIs ...... Very little dum of Understanding to promote the de- Open APIs ...... Very little Europe’s PSD2. The aim is to use consumers‘ Regulator ...... Planned velopment of an independent Open Banking Regulator ...... No digital data strategically to generate eco- Initiatives ...... Early stage API Gateway. Initiatives ...... Early stage nomic advantage. TPP regulation ...... No TPP regulation ...... No In June this year, the Central Bank of Nigeria The introduction of APIs in the financial- sec responded and prioritised Open Banking in tor is included within the framework, which its Payment Systems Vision PSV 2030 (a brief- also supports the implementation of (techni- ing document for a new framework in the cal) standards by 2024. banking sector). Partners, such as the FinTech Centric Gateway of the Open Banking Initia- tive, have joined this initiative. The document should be completed by the end of 2019.

Kenya

Within Africa, Kenya is one of the more de- South Africa veloped countries in terms of Open APIs. De- spite the lack of a legal framework, there are already single Open APIs from banks. These As a Beginner (5), South Africa is one of the mainly include services such as payment ini- continent’s Open Banking laggards. Unlike Overview Kenya tiation, direct debits as well as balance and neighbouring countries, its banking and fi- transaction inquiries. In international com- nancial markets are heavily regulated. Finan- parisons, however, Kenya can be ranked as a cial institutions need to comply with a whole Score ...... 8,5/100 Beginner (5). range of financial, consumer protection and Status ...... Beginner (5) privacy policies, which may be one of the rea- Open APIs ...... Very little Due to specific market conditions, such as sons for the low coverage of Open Banking Regulator ...... No technical progress (see previous remarks on APIs. Nedbank is currently the only bank in Initiatives ...... Early stage M-Pesa) and limited FinTech services, Kenya, South Africa to provide third-party access TPP regulation ...... No like other African countries, can be expected to account information via Open APIs. The to adopt a less stringent regulatory approach scope of the services offered here is greater to Open Banking. than the regulatory requirement in the EU.

Due to the high degree of regulation in the

44 Open Banking APIs worldwide Kenya Open Banking APIs worldwide Nigeria 45 market, it can be assumed that the introduction of Open Banking will also have to com- Example: Nedbank Platforms and ply with legal guidelines. A future central regulatory body for TPPs is, therefore, also South African Nedbank has already launched its expected, however, concrete implementa- Ecosystems tion plans are not yet known. Open Banking platform, which also includes an API Marketplace. The broad portfolio of APIs includes account information and For many banks, Open Banking APIs are the payment initiation, as starting point for the new age of networked 1. Designing innovative digital custom- well as loans, customer banking. As in other sectors, the digital er processes through flexible integra- information, rewards, and economy and the connecting of value chains tion of partner services. In most cases, publicly available banking are also creating a platform economy with- innovative FinTech APIs are connected Overview information such as branch in the financial sector. Regulatory and mar- to provide financial management with offices. ket standards for Open Banking APIs are an PSD2-based account aggregation or South Africa important catalyst, as they require banks to credit processes based on PSD2 account open up and provide third-party access to access rules. Score ...... 8,5/100 their systems. Status ...... Beginner (5) 2. Providing banking-enabled marketplac- Open APIs ...... Very little For banks, the platform economy means es so digital partners can quickly and Regulator ...... No they can network with digital partners at dif- easily integrate the bank‘s products and Initiatives ...... Early stage ferent levels. For example: services into their portals. Typical exam- TPP regulation ...... No ples are white-label accounts, deposits and credit lines. 3. Establishing ecosystems in which banks offer customers heavily customised services from partners. This gives customers best-of-breed complementary services around financial services. For instance, ecosystems for small and medium-sized companies that offer accounting functions, alternative finance and financial analytics as well as banking services.

46 Open Banking APIs worldwide South Africa Open Banking APIs worldwide Platforms and Ecosystems 47 Unlike compulsory PSD2 and Open Bank- ing APIs, banking platform providers decide for themselves how to engage third parties Key Take and how to design access for partners. While PFM they use industry standards to design APIs and access, they ultimately decide for them- Aways selves, or with each partner, who can access their platform and to what extent. end customer‘s trust in the bank partner and can, thanks to the interfaces, enter into a Ecosystems are the ultimate expansion of privileged cooperation. Open Banking is the banks preferred Beyond Loans Banking Open Banking and put the bank at the cen- business model in the digital age tre of the platform economy. They enable Strategically, banks do not necessarily have banks to retain control under their own roof to build their own ecosystems. It may be Open Banking shouldn’t happen in Digital Partner isolation, the maximum benefit for yet provide access to attractive third-party more useful for them to engage in the plat - Distribution banking products as well as to the latest ser- forms of other market participants in order banks comes through further com- vices from FinTechs. With a broader and cus- to form a network with strong partners. mercial, partner and customer facing tomer-oriented range of services, they can strategies Wealth Management SME deliver a richer experience and increase the Ultimately, ecosystems are about mov - satisfaction and loyalty of their customers. ing both customers and demand-oriented There are seven global Open Banking banks into the digital age. With offerings that Pioneers (including the EU) and 12 An ecosystem is also based on the open in- appeal to specific target groups - by sector, Beginners terfaces of the bank, but these do not nec- location or profile - the bank‘s classic range E-Banking essarily have to be subject to predetermined of offerings can be expanded considerably, Seven international markets (including standards or regulations. Banks typically supplementing their online banking or cre - the EU) rely on regulation, the others provide their partners with proprietary Open ating new independent business models. are driven by market standards APIs, which they disclose in developer por- Open tals for a closed user group. Partners can pre- In the battle for the end customer, banks Open Banking is created by new Banking fill their applications with this data and easily must be able to face-off future ‘banking’ customer needs, competitive Platform serve the customer without complex data functions powered by the platforms of large pressures and new technologies entry. At the end of each process, the bank technology companies (like Google, Ama - secures the user data for cross-departmen- zon, Facebook and Apple), which have both PSD2 and similar market standards tal analysis or recommendation manage- customer access and experience with large- are just a catalyst for networking ment. This form of cooperation also enables scale, customer-centred processes on their the bank to rapidly expand or change its -re side. Nevertheless, there are many reasons to More than 10,000 banks in more than lationships and initiatives in a market-driven keep banks as the future designers of bank- 50 countries are affected by Open manner through the loose coupling of the ing ecosystems. This includes their size and Banking APIs systems. ability to invest in comparison to many digital providers; their experience with complex The expansion stages of Open A key principle of ecosystems is that every- customer processes and the underlying fi- Banking are banking as a service, one benefits. Banks get access to attractive nancial products; and the recognised trust in strategic use of FinTech innovations new services without having to deploy or in- the security of banks and their systems. and ecosystems tegrate them into their core systems. They can also offer services in market niches that API platforms are the technological are not economically viable in-house or lack backbone for the flexible implementa - the innovation speed of start-ups. These tion of Open Banking digital partnerships are monetised with lu- crative agreements and revenue splits. For Ecosystems are the ultimate FinTechs, too, such partnerships are attrac- expansion of Open Banking, with tive and promising. They benefit from the the greatest benefit for all involved

48 Open Banking APIs worldwide Platforms and Ecosystems Open Banking APIs worldwide Key Take Aways 49 ndgit Open Banking Plattform

ndgit provides the # 1 API platform for banking and insurance. It connects banks and FinTechs with digital ecosystems. Our technology enables banks to open up to digital partners and quickly and easily connect value-added services using the marketplace. The ndgit FinTech platform thus forms the technological backbone for new applications and IT landscapes in banking and insurance. As early as 2017, ndgit, together with Hypothekarbank Lenzburg, implemented Switzerland‘s first Open Banking platform and was awarded the Euro Finance Tech Award 2017 for the best cooperation between Bank and FinTech. In 2018, the ndgit API platform won the largest FinTech competition in Central and Eastern Europe with the CEE Fintech Challenge. In 2019, the ndgit team, Hypothakarbank Lenzberg, Finstar, Neon and Sonect received the Finance IT Innovation Award for their joint ecosystem. www.ndgit.com

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50 Open Banking APIs worldwide Credits Open Banking APIs worldwide Key Take Aways 51