German Regulator Finds Banks' Data Rules "Impede Non-Bank Competitors"

"Open Banking" is an emerging term in financial services / financial technology that refers, among other things, to the use of open application programming interfaces (“APIs“) enable third party developers to build applications and services around a financial institution. This requires a financial institution to throw open the doors to its customer data and allow it to be used by developers and other third party providers. Think of it as an app store for banks, where the apps allow consumers to compare rates, manage their accounts, obtain credit and make payments – all without having to actually engage a bank.

In Europe, this is set to become the norm in early 2018, thanks to the revised Payment Services Directive (“PSD2“) which was passed in January. PSD2 is designed to create a more level playing field for third party payment processors by making banks in Europe offer APIs that provide access to account information to third parties.