Who is really the target group of PSD2 API?!
It is the very end of 2017 and as usual for this time of the year there are not many news as most people are recharging for the new year. 2018 will be (another) big year for FinTech as the industry is becoming more mature mostly due to new regulation being finally implemented: most importantly PSD2. So what development will we see in Open Banking in 2018?
This year we have seen already a few banks in Europe releasing their APIs (finally!) and due to the upcoming PSD2 regulation we are in the happy situation to see a lot more of them in 2018. The banks that have gained the biggest attention for releasing their APIs were in point of view BBVA (Spain), Deutsche Bank (Germany), Nordea (Finland, Denmark, Norway and Sweden), ABN Amro (Netherlands) and Hellenic Bank (Cyprus).
All of these “incumbent first movers” mentioned above have also released whole “development centres” (aka API portals aka Open Banking platform aka …) to the developer crowd. Of course most of this is still more marketing than actual functionalities, but I have still some hope that at least of these players will offer (a little) more functionality than just the pure PSD2 minimum. But that is not even what I am most curious about. It will be much more interesting to see if these developer portals will attract big interest from the developer crowd. Yes, the initial response to these platforms has been quite big, which is no surprise. Finally, developers can access the API of a bank and play around with it. Surely, also technical skilled bank account owners are eager to become a long term user of these developer platforms to build solution for themselves (which is a big market itself).
Nevertheless, the target group for these open banking centres are usually the developers that are working on new FinTech services for the mass market aka FinTech startups. This group of people will be – at least mid or long term – willing to pay for premium services (all the fancy stuff that is outside in the PSD2 box). And we all know that monetization is something any bank is looking for while dealing with Open Banking – or basically any other challenge. But will the target group of FinTech startups be actually interested to integrate directly with bank APIs? Yes, there are countries where it could be sufficient to “only” integrate 4-5 APIs, but even that requires maintenance and we are not even talking about expansion of the startup or pure further defragmentation of the banking market, which both will increase number of APIs required. There might be a few startups that work very closely with a certain bank and integrate directly with their APIs, but isn’t the rest very eager to get access to financial data from just one single provider?
So the real question is who will be the main consumer of these bank API portals: FinTech startups directly or will account aggregators (like us at figo) be the the main user of these API portals?
At the moment banks are clearly heading for the first option but let’s see what 2018 has in store for us… Happy New Year!
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