Open banking is a global movement that gives consumers control over their financial data while promoting competition and innovation in the banking sector. This movement has gained momentum in recent years, and countries around the world are adopting different approaches to implement open banking.
At Envestnet® | Yodlee® we have seen the development of open banking regulations around the world. We are a global open banking provider having been active since 1999. In this article, we will explore the state of open banking in our 3 key regions within EMEA - the UK, EU, and South Africa.
Open Banking in the UK
The UK is one of the pioneers of open banking, and its implementation of the Open Banking Standard has served as a model for other countries. The Open Banking Standard requires the UK's largest banks to share customer data with third-party providers through secure Application Programming Interfaces (APIs). This sharing of data allows for the development of new financial products and services that can benefit consumers.
The UK's implementation of open banking has been successful, with over 300 fintech firms registering with the Financial Conduct Authority (FCA) to take advantage of the Open Banking Standard. The adoption of Open Banking has also led to increased competition in the UK's banking sector, with new players entering the market and established banks being forced to innovate.
Envestnet | Yodlee can help financial institutions and fintech’s in the UK navigate the Open Banking landscape by providing a secure and reliable API for accessing Open Banking data. But we don’t stop there – we can also help firms get access to data outside the scope of Open Banking through our secure consumer permissioned bank integrations. We can help financial institutions comply with the Open Banking Standard while also enabling them to develop new financial products and services that benefit consumers.
Open Banking in the EU
The EU's implementation of open banking is governed by the Second Payment Services Directive (PSD2). PSD2 requires banks to provide third-party providers with access to customer data through APIs.
The EU's implementation of open banking is still in its early stages, but it has the potential to transform the banking sector across Europe. Envestnet | Yodlee can help financial institutions and fintechs in the EU comply with PSD2 by providing a reliable API for accessing financial data. We are still building out our capabilities in the EU but are looking to start supporting access to data outside the scope of open banking soon. We do not want to just build to open banking, we want to be at the forefront of open finance.
Open Banking in South Africa
South Africa is also embracing open banking, and the country's financial regulator, the South African Reserve Bank (SARB), published a set of draft principles for open banking in the country. The draft principles require banks to share customer data with third-party providers through APIs, and they aim to promote competition and innovation in the banking sector. These draft principles were first published in Nov 2020; since then open banking regulation in South Africa has not progressed. We eagerly wait for the day these draft principles will be transposed into national law. Until then we can help financial institutions and fintechs in South Africa connect and access consumer financial data.
Conclusion
Open banking is a global movement that is transforming the banking sector around the world. The adoption of open banking has led to increased competition and innovation, and it has given consumers greater control over their financial data. Envestnet | Yodlee can help financial institutions navigate the open banking landscape by providing a reliable API for accessing financial data. With Envestnet Yodlee's API, financial institutions can comply with regulations, develop new financial products and services, and meet the evolving needs of their customers.
Want to learn more about Envestnet | Yodlee and how we can support your firm with open banking? Contact the sales team by reaching out to Ryan.McAree-Sullivan@envestnet.com
