Open Banking and Finnova
Internationally, open banking is a hot topic for the future development of the financial services sector. The topic has gained in importance, not least because of regulatory requirements in the EU and in countries outside of Europe. Open banking is often seen as merely the first step towards a platform economy or is used for the implementation of platform-based business models.
Open banking is a concept that allows client, product and transaction data, as well as payment orders to be exchanged securely and in real time via open application interfaces (open APIs). The aim is to enable a better client experience, greater transparency and more innovation in the financial sector. Open banking relies on banks sharing their interfaces with third parties. The highest premise for this exchange is always the agreement of the client.
Consumers determine and promote innovations: embedded finance
In principle, open banking benefits consumers, but also promotes innovations and new fields of competition between banks and non-banks. As we understand it, open banking consists of much more than the PSD2 directive (with account information and payment trigger) in Europe stipulates. Great innovation potential exists in the numerous further applications. We therefore increasingly use the terms 'open finance' or 'embedded finance'.
In future, added value will increasingly be generated in the ecosystem areas in which bank clients are active. Clients want to be able to satisfy their need for financial services, if possible on the spot. To achieve this, banks need to be able to efficiently integrate their products and services into an ecosystem and supplement them with suitable third-party products.
Finnova launches 'Open Banking as a Service' solution
With the implementation of the Swiss NextGen Banking API on 1 April 2021, Finnova launched its 'Open Banking as a Service' solution. The new solution provides a simple and efficient way for third-party companies and fintechs to connect to banks that use the Finnova core banking software. The API is standardised by OpenBankingProject.ch and offers a payment initiation service and an account information service in line with the PSD2 Access to Account Framework.
Digital banking backbone of Finnova ensures technical feasibility
The 'Open Banking as a Service' solution is based on the digital banking backbone, which forms the basis for developing new user experiences (keyword 'embedded finance'). The solution itself and the digital banking backbone are being further developed on an ongoing basis in coordination with the relevant open finance initiatives (e.g. b.Link, Open Wealth, etc.).
Embedded Finance - The Future is Now
download full picture here