Assignment - Open Banking in Fintech

Open Banking in Australia

Regulation

The introduction of the Consumer Data Right (CRM) on July 1, 2020 saw the launch of the first phase of open banking in Australia, marking the debut of a new era in the domestic banking sector.

By the end of 2020 open banking had yet to deliver substantial consumer benefits. Part of the reason for that is the red tape and high costs associated with becoming an accredited data recipient.

Under the CDR system, consumers consent to a transfer of their data from a data holder (e.g. a bank) to an accredited data recipient.

An accredited data recipient has been accredited by the Australian Competition and Consumer Commission (ACCC), the lead regulator of the CDR, to receive consumer data and use it to provide enhanced products and services, as long as they can adequately protect the data from misuse.

A 2020 study found a lot of excitement about open banking within Australia’s financial services industry with 71% of respondents, including banks, brokers and fintechs, stating that they intended to use CDR data.

Among the key challenges to making the CDR regime a success, respondents cited complexity/clarity of the rules (54.2%), customer education (50%), compliance (45.8%) and cost (29.2%).

The most popular use cases centre around using financial and account data to streamline processes and improve user experience. Verifying income and expenses was called out as valuable by 56% of respondents, followed by onboarding automation and account verification.

A recent proposal suggests the creation of a tiered accreditation system that would enable a faster onboarding process and allow smaller players to be able to benefit from open banking data.

In Australia, the introduction of open banking is being done in phases. Consumer data relating to credit and debit cards, deposit accounts and transaction accounts have been available since July 1, 2020. Consumer data relating to mortgage and personal loan data followed suit on November 1, 2020. Banks other than the Big Four – CommBank, NAB, Westpac and ANZ – have until July 1, 2021 to provide access to open banking data. Open banking is expected to be fully implemented by November 1, 2022.

Most respondents believe Open Banking will go mainstream by 2025.

The main goal of the CDR regime is to help customers monitor their finances, utilities and other services and compare and switch between different offerings more easily. The system also aims to encourage competition between service providers, enabling customers to access products and services that better suit their specific needs.

Banks Active in Australia

NAB and CommBank both have developer portals which are open to any developer or interested party which has been accredited with the ACCC. They offers open banking API’s for various services including: product specific information, account balances, account details, transactions, customer information, direct debits, payees and scheduled payments.

Both offer online documentation and support. Access to these API’s is free but it is difficult to obtain information about fees for their use without making direct inquiries.

These API’s would be useful for BNPL payment services.

Fintech API Aggregators active in Australia

Adatree

This is a technology company specialising in Consumer Data Right compliance, released in 2019 the first aggregation of banking product information using the new Open Banking Application Programming Interfaces (APIs).

Adatree’s offering is the first to aggregate all available banking product information APIs into one single API so that product information can be centrally accessed. This removes the need to connect to each bank individually. The API can be accessed through the Adatree Developer Portal, free of charge. As other banks and credit unions release their product information APIs, these will also be included in the Adatree product aggregation API.

The product aggregation API will enable comparison of data across banks for product features, product pricing and customer eligibility. Product information APIs do not contain any personal data and is the first phase of Open Banking.

Basiq

Financial aggregator startup Basiq created its open banking platform, categorizing its APIs into data services. It provides affordability APIs that give banks a more accurate view of a customer’s financial position during the loan application process.

Up

Up, a digital bank that operates under Bendigo and Adelaide Bank’s ADI (authorized deposit-taking institution), uses TransferWise’s API to enable customers to make low-cost international transfers directly from their transaction accounts without having to leave Up’s app.

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Open banking is not yet available in Canada there is Open Banking Initiative Canada (OBIC) in Canada that is supposed to launch some sort of program this year. I keep getting more disappointed in Canada the further I go through this course :joy:

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Non exits in Namibia as of now.

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Amazing @PhilD99!

Thank you for that :pray:

Thanks Adam!

Yes, I was surprised myself, when I looked into it, at how active this whole area is becoming! A lot of opportunities.

Cheers

Phil

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In Australia we have the CDR as mentioned in your video but the regulators have been way to slow to allow open banking to become a reality. we wont see it in our country for another 2-3 years before mainstream.
even our big 4 banks are not really doing anything with it.
regulators hiding behind the fact they are protecting consumers but in reality it’s because the big 4 banks make up the majority of our financial system and it’s too big a risk.
the limited open banking APIs we do have are very $$$
looking forward to in 3 years time when it’s mainstream here

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  1. Hungarian National Bank sent around 70 questions to different financial institutions to collect an information regarding an implementation of OB regulations. It is expected they at the end of October there will be new rules issued.

  2. See the glory list of the Hungarian pioneering banks

MKB Bank: https://portal.sandbox.mkb.hu/
K&H Bank: https://www.kh.hu/psd2-fejlesztoi-portal
Budapest Bank: https://openbanking.budapestbank.hu/
Takarék Csoport: https://psd2-sb-takarek.hu
Erste Bank: https://developers.erstegroup.com/docs/apis/bank.ebh
Raiffeisen Bank: https://sandbox.raiffeisen.hu
UniCredit Bank: https://developer.unicredit.eu
Sberbank: https://portal.sandbox.sberbank.hu

  1. http://wyze.me/
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I. PSD2 has been transposed into Slovenian law in February 2018 (last version ZPlaSSIED-A, 7_2020).

  • Article 45 (performing operational tasks through external contractors)
    (1) A payment institution that intends to perform individual operational tasks related to the provision of payment services through external contractors shall notify the Bank of Slovenia thereof in advance.
  • Article 48 (sending a notification to the competent supervisory authority of the host country)
  • Article 54 (management system and internal control system)
  • Article 68 (separate management of users’ funds)
  • Article 69 (insurance contract or other guarantee)
  • Article 70 (protection of users’ funds at hybrid payment institutions)
  • Article 105 (Information for the payment service provider maintaining the payer’s account for the payment order service)
    Where a payment order is issued by a payment order service provider, it shall make available to the payment service provider maintaining the payer’s account information enabling the payment transaction to be identified.
  • Article 114 (preliminary information to protect consumers from unfair commercial practices)
  • Article 118 (rules on access to a payment account for payment order services) -PISP
  • Article 119 (Rules on access to and use of payment account information in account provision services) - AISP
  • Article 143 (responsibility for the use of a unique identifier)
  • Article 153 (authentication)
  • Article 172 (consumer information)
  • Article 241 (use of confidential information)
  • Article 243 (competences of the Bank of Slovenia for supervision)
  • Article 258 (revocation of license)
  • Article 287 (reporting obligation of payment service providers)
  • from Article 288 - 310 are 18. CRIMINAL PROVISIONS; following are
  • Article 311 (sanctions for infringements of Regulation 924/2009 / EC)
  • Article 312(sanctions for serious infringements of Regulation 2015/847 / EU)
  • Article 316 (sanctions for serious infringements of Regulation 260/2012 / E

Open service API
image

II. Developer portals (e.g.):

  1. https://oapideveloper.addiko.si/sandbox
  • When entering the first page of the development portal, a form for selecting the appropriate eIDAS certificate is available.
  • Data on the applications for which the user is registered are defined in the attributes of the certificate.
  • By logging into the system, the Payment Order Service Provider / Account Provider is provided with access to the API documentation, API development tool, login passwords of test users and the possibility of exchanging messages with the bank.
    After registration and login, it is necessary to enter the redirection URI for Payment Order Service Providers / Providers of account information used as information on the authorization server to redirect bank users after authorization.
  • TPP is expected to register one or more URLs that will be used to redirect Oauth production. Registered redirect URLs may contain query format parameters, but may not contain anything in the snippet.
    Addiko Bank uses the OAuth2 Authorization Code data stream with PKCE for strong authentication
  1. https://www.bksbank.si/fizicne-osebe/odprto-bancnistvo-apipsd2
    BKS Banka provides third party providers (TPPs) with access to payment accounts through a technical interface for access to payment account information.
    They provide service providers with software interfaces (APIs) for:
    Account Information (AISP),
    Payment orders (PISP),
    Issuance of card payment instruments (PIISP).

  2. https://www.nkbm.si/payment-services-under-psd2

III. Api Aggregators
First column Providers (Ponudniki), last column Services used by (Storitev uporablja)

image

Images from: https://denar.svetidej.com/sl/money-informator/open-banking.html

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United Kingdom Open Banking

  1. Open Banking Regulatory Background:
    In 2016, the Competition and Markets Authority (CMA) published a report on their investigation into competition and innovation in the retail banking industry. They found that big banks dominated the market and consumers and small businesses would benefit from increased competition. To remedy this, the CMA and UK government mandated nine of the largest banks to implement common standards for open banking. This would ensure that there were standard APIs that allow customers to securely share their financial data or safely initiate transactions. Trusted companies could use these APIs to offer new innovative services to customers and SMEs increasing competition. (https://www.openbanking.org.uk/regulatory/)
  2. First Direct Bank has an extensive developer portal. Which states at the beginning that: Open Banking has been designed to offer you greater control of how you manage your money by making it possible to share information with third party providers (TPPs). TPPs can provide a range of services such as viewing all your accounts in one place, budgeting and comparison tools and much more. Additionally it is also stated that: All TPPs that access your information must comply with data protection laws and must be registered or authorised with the Financial Conduct Authority (FCA).
    (https://www1.firstdirect.com/banking/ways-to-bank/open-banking/)
    Regarding the cost, unfortunately the portal requests that you contact them for further details if you are a TPP interested in their APIs. So I couldn’t find out.
  3. Token.io (by far the largest fintech aggregator operating in the UK) states on their website that: Token Data API provides secure access to seamlessly aggregated account and transaction data from over 3,000 banks in Europe. All from a single interface.
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Nice job, super thorough!

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Thank you.
This one, is a super interesting course, of general knowledge, if one wants a financial education in first place, I would say. I had no clue of Fintech before, in my country especially, I must admit. & I like how the course is structured, where you have to research about Fintech in the region where you are from. This actually made me sink into the regulatory aspect, the bigger pain when I started this course, but once you obtain some knowlwdge & understanding, it is so much easier to read & undestand it. Although it took me a lot of time doing reasearch it is very important that I did it.
I did the DeFi courses before & started with Bitcoin monetary revolution now. This all will “Bring me that horizon”. Fintech & DeFi may merge as Gustaf said, but I see so much more advantages in DeFi.

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Awesome!
I’m yet to get started with it but by the sounds it’ll be more interesting than I had expected.

My aim was to get started with the coding courses as early as possible and tackle the broader scope conceptual ones like this later on. This will be good to peruse through development of the projects!

The regulatory aspects of starting a project can be pretty terrifying, especially in DeFi. I’m looking forward to this course way more now!

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I followed Ivans’ suggestions, listening to Good morning crypto & enrolling in the basic access to the academy. Did Bitcoin & Ethereum 101 & then the JavaScript course, which was difficult for me as I have never seen code before. Then I invested in a DeFi project & I used my one month free access to the broader range of courses in the academy (I won by commenting on Ivans’ Youtube stream) that enabled me to study DeFi. Then I enrolled in the extended yearly plan. Did DeFi 101 & DeFi 201, but needed to study Ethereum smart contract programming 101 to conclude the part that was about Flash Loans. Later, past month, I did Polkadot 101, Blockchain business masterclass & now am doing Fintech & started with Bitcoin monetary revolution yeserday. Started with Ethereum smart contract programming 201 after 101, would like to continue too, just it takes me more time with code & wanted to learn other things too to have a brader perspective. I like combining learning different things too, depending on the mood & time available.

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What a prize! :partying_face:
I see you signed up at end of 2019… Man I wish I had the foresight to dive into the space back then. Going 110% now to make up for lost time haha.

Yeah it’s probably wise to run through the programming courses concurrently with a conceptual-focused course like this. Full code can get dizzying after a while if you’re not wired for it!

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  1. Open Banking is an emerging aspect of the Canadian Financial System. Canada has been dragging their feet to regulation and is currently in the process of drafting/passing legislation.

  2. Scotiabank had apparently put API on Github a few years ago, but it now looks like all repositories have been erased or no longer exist. They have no developer portal from what I can tell. TD is another bank that I have chosen and could find nothing for them either

  3. https://nordigen.com/

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It’s listening to Ivan that made my mind set in a different way. But what it touched me most was when he said that we “might be losing time where we are if we want to help this industry” & the decentralised nature of blockchain hooked me up… I was slow at first cause I am not native English, but following some projects on Telegram & Youtube English content made me improve my English. But at the end of 2019 studying blockchain was something of personal interest, while now I perceive it as building my general knowledge for the traction it is getting. Then the pandemic happened last year & we were locked down in spring & autum/winter when I did most of the courses. I learned I have to set my mind mind on learning, so I try to study few times a day, combining it morning, after launch & evening & I compound my time when I do other things (laundry, cook, clean…) when I do the theory courses. For code I have to sit down & understanding few lines can get hours if you are new to it.
But you know, do not think you are late, it is good you are where you are & have a long term perpective doing it step by step will help you reach your goal.

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Wow! Amazing story @makinitnow. :raised_hands:

Best of luck to you :pray:

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Good one! I’m pretty lucky to have English as my first language. Props to you for overcoming that :+1:
Cool that you get 3 study sessions in a day. Keep at it. If you can maintain that habit imagine where you’ll be a year from now :eyes:

With the pandemic I watched my business crumble haha - maybe it was a blessing in disguise now that I get to go full time in blockchain/crypto :heart:

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Thank you Adam. I already learned so much & I would recommend the academy to everyone that’s new to the space especially, cause once you have the basics / framework of your knowledge built is so much easier to learn & understand many things. Frankly, starting with understanding monetary policy at first, that’s for sure for everyone, a must.

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Sorry for your bussiness. But the end of something can be a start for something new. It’s looking at the opportunities always, the good side of things that keeps us going on & make exceptional things in the end.
Yes, I was able to learn three times cause I had been using some extra plus hours. I have more work in the past weeks & I need a little repetition too & to seetle knowledge. For example I did the FinTech theory very fast, but the assignments are taking me more time. Before I finish the assignments in the last section I wanted to relisten to the Blockchain for business masterclass till the part of hyperledger where databases are explained.
But I would like to restart that pace after vacation…

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