Technological innovation is disrupting the financial industry. In the last couple of years, many fintech banks and digital finance startups have emerged. These new firms, like Simple, Chime, Varo, and Moven, claim to offer consumers more choice, better service, and lower costs. Meanwhile, global giants like PayPal and Amazon are exploring offering select banking features. Nonetheless, many of the big players in fintech are also transforming digitally.
What Is Driving the Open Banking Movement?
Application Programming Interfaces (APIs) are at the heart of the digital finance revolution, along with the shift towards open banking around the world, meaning that banks are increasingly giving third parties access to their financial data. First developed in the UK, open banking has since spread to the EU, directly stimulated by regulatory initiatives. These include the Second Payment Service Directive (PSD2), which compels banks to provide their customer data to third-party providers (TPPs) through open APIs.