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Q&A session on PSD2: How RBI will make the APIs available to third-party providers
The EU's PSD2 directive stipulates that banks must enable third-party providers such as FinTechs or other banks to access data from current accounts at the customer's request. The deadline for implementing the directive ended on September 14, 2019. In a Q&A session with the brutkasten, Christian Wolf, Head of Group Transformation at Raiffeisen Bank International AG, answered how the bank will make the necessary APIs available to third-party providers in the future.
+++ Elevator Lab: Cooperation with FinTechs to make banking more innovative +++
How has the PSD2 directive been received within the banking industry?
The PSD2 directive has certainly caused unrest in the banking sector. Initially, it was perceived as a threat, as it obliges banks to make their customers' transaction data available to third-party providers. In this respect, there was a fear that the banks would lose the interface with the customer.
How did RBI deal with the PSD2 directive?
At RBI, we realized very quickly that we had to perceive this supposed threat scenario as an opportunity. The PSD2 guideline therefore became the starting point for our open banking strategy. To that end, we looked at open banking models in the US and Asia. We were particularly interested in the assumptions on which these models are based. The focus was on the question of why banks proactively make their data available to third-party providers without legal requirements.
How was the PSD2 guideline implemented at RBI?
The PSD2 directive came into force in January 2018. The implementation had to be fulfilled by the deadline of September 14, 2019. RBI is represented in 13 CEE markets, six of which are EU countries, in which we are now live with the APIs. These include Hungary, Romania, Bulgaria, Croatia, the Czech Republic and Slovakia.
In the Czech Republic and Slovakia, however, we were already live earlier, as the local legislator has stipulated this. The PSD2 is a directive that has to be implemented by the respective legislators with national law.
Which specific applications do the APIs enable?
The classic use cases for PSD2 APIs are aggregation use cases and payment initiation services. An aggregation use case enables, for example, the simultaneous display of several accounts from different banks in one app. The applications that go beyond the PSD2 requirements include, in particular, KYC processes and identity use cases. This also includes pay integration applications for corporates and SMEs. The third-party providers to whom we make the APIs available are four customer groups. They include FinTechs, developers, corporates and BigTechs.
How are the APIs made available?
In future, the APIs will be made available via a dedicated marketplace, which will be launched with MVP status at the end of November. We pursue the philosophy of creating a central entry point for all third-party providers. The marketplace should not only be aimed at developers by making the APIs technically available, but also address a broader audience. For example, we want to use the platform to show which use cases are available and which cooperation options are offered to third-party providers by the APIs.
How should the individual third-party providers be addressed?
We reach FinTechs very easily via the RBI Elevator Lab. The target group is not limited to its participants. We are already actively inviting corporates, big techs and developers to identify use cases that we can work on together in the future. The first developments with corporates are already underway. It is important to note that the open banking strategy does not aim to develop private APIs, but rather to make the APIs available to a broad audience on the marketplace.
What is RBI hoping for with the open banking strategy?
In principle, this strategy is about how we as a bank manage to become a seamlessly integrated, value-adding part of the customer's customer journey. Due to the connected economy, sooner or later we will certainly be confronted with customer requirements that we cannot solve on our own. In this case, it makes sense to approach partners such as FinTechs and work with them on a solution. But the joint development of new products is also the focus of our open banking strategy. The PSD2 guideline is therefore not the end, but the starting point in order to be able to use the new infrastructure profitably for all parties.
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