Not so long ago, the banks operating in the EU were the owners alone and undisputed their customers’ account data. Now, the open banking rules allow customers To obtain better offers if they agree to share their account data by their bank with other companies, which, in turn, can use this data to design and offer their own financial products to account holders.
What is the open bank?
Any company can now benefit from real -time financial data provided by banks and translate them by better processes and new services. This innovation in the EU paying market has made data on bank accounts a precious product. The main risk in open banking space concerns the treatment of customer consent, since any unauthorized access to the process could have a huge impact on the economy and integrity of any individual end user. This risk is managed by strict guidelines on all – internal security and external to transactions monitoring.
This revolutionary approach to financial services is contained in the EU 2015/2366 EU directive (Directive of payment services 2 – PSD 2) which seeks to open the payment markets to new entrants, which leads to greater competition, a Bigger choice and better prices for consumers. It has been in force since the beginning of 2016 and the Member States had to integrate it into their national legislation in early 2018.
+++ Open Banking (R) Evolution in central and eastern Europe: ideas, trends and players +++
Jump on the opportunity
Two Bosnians living in Sweden, Adnan Šporo and Alen Hasičević, who have a long history of development of payment solutions for the Scandinavian market, jumped at the opportunity to seize a share of this new market. At the end of 2018, they founded the startup CrazyAn open banking infrastructure platform.
“In 2016, we came across the” open bank “concept and the second newly past payment service (PSD2) (PSD2) which obliges each bank operating in the EU to share data from their account by creating and launching interfaces dedicated application program (API), software intermediaries which allow two applications to speak to each other – with certain companies examined in depth and authorized by the financial authorities concerned. Huge opportunities in the payments sector, we have realized that technical and regulatory complexity would exclude most European companies to have advantages. Open banking accessible to all European companies, ”said Adnan ŠPORO.
Having already founded and released from several companies in the past, for Adnan Šporo attracting investors for Finshark was not a problem. “What turned out to be difficult is to explain the banking concept open so early,” he said.
Today, Finshark belongs to its founders, several investors and employees. It has become an open banking platform with a layer of data and payment data which are currently used in Scandinavian countries, and the plan, according to Adnan Šporo, must extend the operation in Spain, in Italy, France, In Germany and the Bass countries and the Netherlands in the third quarter of 2021.
Competition is strong
Finshark operates in a competitive environment which, according to Adnan Šporo, is a good thing: “The main idea with PSD2 is to allow innovation and to cause more diversity in the financial sector. The road to this innovation is paved with challenges that can be overcome by choosing the right financial partner. »»
At the time of the creation of Finshark, several competing platforms were also underway.
“Some of the largest, such as Tink and Plaid, were already in the marketing phase due to the fact that they started much earlier as consumer -oriented products. These two companies are always the leaders in the field of open infrastructure and banking products. There are already ongoing mergers and acquisitions, Tink also being the leader in this area, “said Adnan Šporo.
Looking at the future of the open bank
“However,” he explained, “we must look beyond the PSD2 and what is possible today. In Scandinavia, for example, the majority of financial catalysts (such as the banking identifier used for a Solid authentication of customers) push the limit of what is possible almost daily. Taking the dominant position on the market. New generation depending not only of the technology of open banks, but even more in the financial catalysts that consumers know and trust it. »»
Success recipe
For this reason, at the end of 2018, Adnan Šporo and Alen Hasičević founded Hiq Development, a sister company in Sarajevo, Bosnia and Herzégovine. “In order to develop the next generation of financial products, you need talented people to work with you. The swimming pool of talented people is particularly large in Bosnia and Herzegovina, and since Alen and I were born there, the creation of a company in BIH and not another neighboring country was a natural choice. However, the main reason for the choice of Bosnia is access to a very talented pool of people, “said Adnan Šporo.
Tarik Jažić, director of operations of people at Hiq Development, explained that “a link between our inhabitants in Scandinavia and the national BIH workforce turned out to be a recipe for commercial success.” “We have provided a professional and young bosniac-herzegovin workforce capable of monitoring innovations and market requests, because this connection with the diaspora allows them to be easier not only to the international market, but also to new trends and innovations. “
Slowly kiss the challenge
Adnan ŠPORO believes that complex political and financial reality in many countries of the Western Balkans, including Bosnia and Herzegovina, hinders innovation and that, unfortunately, there is no sign of adaptation to EU regulations in the open banking sector. However, he pointed out that there was room for optimism because banks and other financial institutions can show the way themselves simply because banks must remain competitive and follow what is happening in the rest of the Europe.
“While PSD2 imposed a huge burden on the banks operating in the EU, and many were initially reluctant to fully implement the regulations within their systems, this has changed over time and most banks have now fully Adopted the open banking concept. The change has gradually occurred when more and more banks have realized that even if they were to open their data to potential competition, they are also able to consume data from other sources that were previously closed to them. Some banks even go as far as the systems opening – via premium APIs – which are not even necessary by PSD2, “said Adnan Šporo.
The development of Hiq was also recognized by the USAID, which financially supported the company thanks to its project “Diaspora Invest”. This support was used by Hiq Development to buy IT equipment that helped define the land to increase the number of employees. Today, Hiq Development has 16 employees.
“We are convinced that 2021 will bring new growth and new opportunities. We also have plans for new projects, but it is too early to talk about it, “said Adnan Šporo.