This brief posting referenced in Finextra is a reminder that open banking requirements in Europe (PSD2 for the EU and CMA for the UK) do not simply apply to retail banking operations in order to better serve consumer innovation through fintech account access. It also covers banks in general, including the more complicated scenarios involving corporate banking. While the UK payment authority took a somewhat different implementation approach then the PSD2 particulars, we expect they will end up in the same place eventually.
Open Banking in the UK, which went live in January 2018, requires the nine largest UK banks to publish open APIs, enabling regulated third party providers to access bank accounts securely and with account holder consent.
The piece references Citi as jumping ahead to join the UK Open Banking Directory as a PISP in order to serve business clients better. The use of APIs is becoming a de-facto market requirement in non-regulated markets (the U.S. as one example) given the level of non-bank competition and innovation required to meet customer demand. Citi has typically been at the forefront of corporate innovation as one the top global corporate banking institutions.
Ireti Samuel-Ogbu, EMEA head payments and receivables, treasury and trade solutions, Citi says inclusion in the directory is part of a a wider shift in the global banking landscape from batch processing to real-time payments and collections as banking systems becoming accessible through APIs.
In a recent report titled Open Banking and Its APIs Debut in Europe and the U.K…..and Next?, we cover the details and implications of the new open banking environment. As we continue hurtling forward into the new world, we’ll keep you posted.
Overview by Steve Murphy, Director, Commercial and Enterprise Payment Advisory Service at Mercator Advisory Group
