Total digitalization has brought changes to the banking industry. FinTech gives users the right to choose an alternative. And today, Open banking is becoming a significant source of innovation that is poised to reshape the whole financial industry, not only in Europe, where Open Banking started, but all over the world too. 2018 was a turning point for banking as the EU countries incorporated the Revised Payment Service Directive (PSD2) into national, forcing banks to publish their Application Programming Interfaces (APIs). Three years later, we already set the right path.
Open banking is a banking practice that provides third-party financial service providers open access to consumer banking, transaction, and other financial data from banks and non-bank financial institutions through the use of application programming interfaces (APIs).Throughout history, banking has remained a closed industry, monopolizing the majority of other financial services. In this framework, the following 5 Open Banking companies reshaped the European banking industry putting Europe again as main innovation tech driver.
1. Minna Technologies
With the proliferation of subscription services, combined with our lives becoming almost 100% digital, there’s a rising need to be able to manage these services. But banks don’t have an answer. Then, Minna came out. Launched in 2016 in Sweden, the startup enables customers to manage subscription services via their bank’s app, automatically, cutting the data and financial ties between the merchant and customer. The platform also notifies customers when a free trial is about to prevent them from charging and facilitates utilities switching to help customers find better deals.
Recently, FinTech Bud has selected Minna Technologies, to provide banks with access to Minna’s subscription management tools through Bud’s Open Banking platform. The combined service will make use of Bud’s data intelligence capabilities to identify spending on subscription products like Netflix and Spotify and will allow users to manage those subscriptions from inside their primary bank apps.
2. Tink
Established in 2012 in Sweden, Tink’s open banking platform enables banks, fintechs and startups across Europe to develop data-driven financial services. Through one API, Tink allows customers to access aggregated financial data, initiate payments, enrich transactions and build personal finance management tools with a platform that opens up new possibilities for a better customer experience – combining aggregation (AIS) and payment initiation (PIS) with data enrichment and personal finance management (PFM) products. Today the startup counts 10 billions annual transactions and connects more than 3,400 banks that reach over 250 million bank customers across 14 European markets.
Last summer, Visa has signed a definitive 1.8 billion euros agreement to acquire Tink. According to the media, The combination of Visa’s proven infrastructure and know-how with Tink’s APIs, technology and customer relationships is expected to help accelerate the adoption of open banking in Europe by ensuring a secure, reliable platform for innovation. Tink will retain its brand and current management team, and its headquarters will remain in Stockholm.
3. Yapily
Established in 2017 in the UK, Yapily has been working on a single, unified open banking API for several European markets. The company focuses exclusively on API integrations, offering a proprietary open API that enables companies to access the financial information needed to meet rising customer expectations in banking, lending, payments, accounting, and money management. When it comes to coverage, Yapily supports more than 1,500 banks across 8 countries. “We have between 90 and 99% coverage in the U.K., France, Spain, Germany, Ireland, Austria, Italy and the Netherlands,” founder and CEO Stefano Vaccino told media.
Its clients include Intuit QuickBooks, IBM, and GoCardless. It also collaborates with technical design authorities and regulators, such as Open Banking Implementation Entity in the UK and Berlin Group. Today, Yapily is growing fast. Last July, the fintech startup raised a $51 million Series B funding round led by Sapphire Ventures. Through this new funding round, the company plans to expand its commercial presence across Europe.
4. TrueLayer
Headquartered in London and in 2016, TrueLayer is a global open banking platform that makes it easy for anyone to build better financial experiences. iTrusted by millions of consumers and businesses around the world, TrueLayer, as an open banking API provider ,offers two products for businesses: Payments API and Data API. It lets applications connect securely with the bank of the end-users to read their financial data, verify their identity and initiate payments.
Recently the startup has announced the launch in Australia of its global Open Banking Platform. This follows approval by the Australian Competition and Consumer Commission, making it the first European open banking specialist to establish a presence in the APAC region. The TrueLayer Open Banking Platform is backed by proven, market-leading data and payments APIs that currently process more than half of all open banking traffic in the UK, Ireland and Spain. The company has already expanded to Germany, France and Italy and partnered with companies including Monzo, Zopa, ClearScore, Plum, Emma, CreditLadder, Canopy, and ANNA Money. Thousands of developers are actively developing applications on its platform. Next step? To expand further to Hong Kong and Singapore.
5. Railsbank
Founded in 2015, Railsbank is an open banking API and a banking-as-a-service platform that gives regulated and unregulated companies access to global banking. Railsbank has quickly grown to become one of the leading BaaS players, providing an open platform and APIs that enable start-ups and established companies to prototype, launch, and scale financial products as deeply embedded elements of their customer offering. They have set out to industrialize BaaS to make it easy for customers to launch their products in six to eight weeks, and at a competitive price point. As said by the company, the platform provides fintech companies with a range of wholesale banking services, including IBANs, receiving money, sending money, converting money, direct debit, issuing cards, and managing credit through APIs.
Today Railsbank operates throughout the UK and Europe, APAC and the US, positioning itself to help non-financial brands with ‘experiences’. "Instead of thinking in terms of delivering banking or cards, Railsbank is empowering brands to build next-level financial experiences they always imagined, at a pace previously unimaginable”, Nigel Verdon, CEO and co-founder of Railsbank said. “Finance is not about the product, it is part of an experience”, added Verdon.
