Future of Open Banking: Evolution, Not Revolution

During the Digital Freedom Festival, the discussion about the future of Open Banking took place gathering experts from the banking, fintech, payments and policy sectors. Eleven months have passed after PSD2 (Payment Service Directive) introduction that promised a revolution in the financial sector – what has really changed and what to expect in the future?

“A lot of sensational headlines in the media talking about the revolution of finance and that everything will change, but we have not seen drastic changes in a way we manage our finances. There is a reason why PSD2 is called an invisible reform of finance, but it does not mean that there is nothing happening to shape the future of banking,” said Mārīte Aleksandra Silava, Fintech Community Manager at Swedbank in the opening remarks.


Many Initiatives on the Policy Side

European Commission (EC) has set up an internal task force on financial technology that has been looking to relevant stakeholders and considering the case for a coordinated European response to enable financial technologies and innovations in the European Union (EU), informed  Pēteris Zilgalvis, Head of Unit, Digital Innovation & Blockchain; Co-Chair, Fintech at European Commission.

“EC is tech neutral in a sense that we try to make sure that our strength in the deep-tech areas is built upon in the Europe. Industrial policy has to push the innovation,” said Pēteris Zilgalvis.

He also marked out that the research and innovation of AI, cloud and blockchain are the technologies supported by EC trying to make regulatory frameworks to fit for the take up. Standardised API Interface is planned to be adopted to continue smooth implementation of PSD2.

However, the EU infrastructure of blockchain is planned to enter the implementation mode already in 2019. The EU countries and Norway hope to make cross-border services, including those regarding regulatory reporting and logistics, more efficient and safer.


Evolution of Open Banking and APIs

Oleg Marofejev, Head of Open Banking in Nordic and Baltic region at Swedbank during the discussion marked that Open Banking is an important social and legal change. Before, you had to have a contract to interact with the bank.  It liberalises the financial data and also opens up the legal way to access the bank and to get the data with customers’ acceptance.

He also noted that as digital citizens, we are entering a very interesting phase of the digital world. Financial data is one of the most sensitive data we have, and it becomes available to a wider group and that definitely ignites the innovation and disrupts monolith business models of banking industry. Fintechs have a possibility to jump in that value chain, take a customer, innovate and create some niche products or services.

“Three years ago when we started to speak about PSD2, it seemed as a paradise. Those who really work with Open Banking and APIs know that the devil is in the details and there are so many details. This policy does not have standards. We are trying to standardise, but there are so many different legacies in the Europe. Standardisation is a huge challenge for the Europe and it will definitely take a couple of years,” said Oleg Marofejev, Head of Open Banking in Nordic and Baltic region at Swedbank.

Oleg Marofejev noted that there are different ways for fintechs to access the bank. One is an illegal way or so called screen scraping and there is the legal way – API, that is more structured way allowing the customer to understand what the data will be used for.  


Consumer and Industry Responsibility

“It is important to act with our data in a very responsible way. It is crucial for customer to understand which company they give their credentials to. It is not always easy, as the company may be found in the regulator’s register with one name, but its service operates with another,” said Marofejev during discussion.

“The world is changing and becoming more digitalised. There are two things we have to think about when driving these changes. One is the balance between convenience and security. We cannot negotiate the security when we are trying to make things more convenient. And the other is the question of social inclusion – to take care of the consumer segments who are not really into digitalisation. Industry also has to have a responsibility to take care of these people as well,” said Majda Nogo, Head of Business Development and Baltics at VISA Europe.


Fintechs – a Lot of Things are Happening Behind the Scenes

Mārtiņs Šulte, CEO and Co-Founder of Mintos said that Open Banking means that trusted 3rd parties will have an access to the customer data. Customers are the ones who will definitely benefit from the Open Banking.

At the moment a lot things are happening behind the scenes and many banks are very keen on Open Banking. Some of them have already real projects, however, it will take some time for several reasons starting from security issues, API development to the changes of mindset.

“In the future financial services will not be associated only with banks. There are definitely some challenges for all sides of the players – banks, fintechs and also regulators. Banks have to change their mindset that they don’t owe the customers’ data and they have to share it. Banks are getting there and putting their infrastructure in place but it takes time. The fintechs have to see the APIs and how they work. Regulators have to have the confidence that there is enough security,” said Mārtiņs Šulte, CEO and Co-Founder of Mintos.


Evolution of Open Banking and the Road Ahead

APIs and PSD2 will continue to dominate the banking agenda also in 2019 and beyond. It will increase competition and, therefore, greater consumer choice. The new sharing culture in financial sector is on its way with the Open Banking standardisation opening the doors to innovation.




About the Digital Freedom Festival

The Digital Freedom Festival is a global technology, startup, policy and lifestyle festival, which will be held on November 30th and December 1st in Riga. It will gather technology and startup entrepreneurs, experts, policymakers, investors, journalists and motivational speakers from all over the world to look for answers to how entrepreneurs, society and and policymakers can better cooperate and use the benefits provided by technology.

In 2017 the Digital Freedom Festival gathered 1300 technology and startup entrepreneurs, experts, policymakers, investors, journalists and students from 36 countries. The conference livestream was viewed more than 9000 times.

The conference is organised by the Digital Freedom Festival group, the DFF NGO, as well as the Lejiņa & Šleiers reputation management agency. Festival official bank – PNB Banka, startup competition partner 500 Startups, Rockstart, European Commission, USA Embassy, Dutch Embassy etc. Media partners – Delfi, Dienas Bizness, LETA, Diena, SestDiena, Kapitāls, The Baltic Times, LabsofLatvia,,,, etc.

Two-day festival tickets are available online.

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