Today, we can perform many banking transactions via internet or mobile banking without the need to go to a bank. Especially with the transfer of services provided in all areas of our lives to the digital world in 2020, we can say that we have begun to feel that we need a service infrastructure far beyond internet and mobile banking, which allows us to access and transact with the infrastructure of only a certain bank.
What is Open Banking?
Open Banking is a platform where user data is shared with third party providers, in order to provide a better service to users and to offer financial opportunities. While banks publishes application programming interfaces (API) that enable them to access their own customer data for third-party service providers within the framework of certain rules, third-party service providers can develop new and original projects using these APIs.
3rd party service providers mediate the transaction, which is carried out independently of the customer’s relationship with their bank. With the customer’s approval, they can initiate a payment transaction, withdraw money from the customer’s account or obtain bank account information so that the customer can make transactions more easily.
Where Did Open Banking First Start?
Open banking applications, which first came to the fore in the UK, were developed in order to create a new ecosystem in the financial sector with the power of technology and to increase competition and opportunities. The open banking regulation implemented in the UK was revised by the European Union in 2015, and the foundations of open banking were laid in the new directive presented as the Payment Services Directive 2 (PSD2). In 2016, the UK Competition and Markets Authority brought together the 9 largest banks and government-licensed initiatives in the country under the roof of the Open Banking Implementation Entity (OBIE). Open banking applications in Turkey first came to the fore in 2013, inspired by PSD1, which came into force in the European Union. Later, the amendments in the Law No. 6493 on Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions, including the open banking stipulated in PSD2, entered into force as of January 1, 2020.
What Will Open Banking Change in Our Lives?
In fact, many of the services we receive in our daily lives are offered through various APIs. E.g; Applications that allow us to track any order simultaneously on the map use Google APIs. While Google provides weather information to us, it gets this information from a third party and does it through the API. You may have seen the option to sign in with Facebook / Google accounts on some websites or mobile apps. The apps that provide this service take advantage of these platforms’ APIs to authenticate the user at each sign-in, rather than actually signing into users’ social media accounts.
Examples of open banking seem to appear in many areas in the future as well as today. Banks have a lot of data about themselves that even their customers don’t have. Within these data; There are how much grocery shopping they do with their credit cards, how much they spend from which store per year or the annual expenses that companies make. With the sharing of customer data with third parties through open banking applications, personalized and convenient opportunities will be offered to consumers to meet their needs. E.g; for a person who makes 1,000 TL purchases per year from the x store, a 10% discount can be applied to their next purchases. Although it may seem complicated, APIs are actually an important service designed to make our lives and financial management easier.
By discovering our Open Banking platform now, you can enjoy the conveniences we offer and invest in the future.