Open Banking in Czechia

Open banking in Czechia - Nordigen

In September 2019, PSD2 went live in the EEA. The Czech financial services market is highly competitiveand Czech banks already offer open banking.
 

What is Open Banking and PSD2? 

Open banking is banking practice that securely shares financial information such as consumer banking, transactions and other financial data to third-party financial service providers (Estevez, 2020). Sharing data is done through the use of application programming interfaces (APIs) and only with the consent of customers (The Balance, 2020). Open banking is the drive behind both innovation and competition in the financial industry (Cahill, n.d.). 

PSD2 is a European Directive that regulates electronic payment services, was implemented in all EEA countries in 2016 and went live in September 2019.
 

Open Banking in Czech Republic

The Czech financial services market is highly competitive and there are 215 fintech startups in Czech Republic (Tracxn, 2021). In 2019, the Czech government announced a new innovation strategy to increase the use of digital technology among businesses and incorporates the existing strategy for digital innovation called Digital Czechia (DESI, 2020, 10). A big part of this strategy is to support high-tech start-ups and implement innovative solutions in the economy (DESI, 2020, 10). The strategy aims to increase the global competitiveness of Czech companies. 

The Ministry of Finance is assisting in the development of the Financial Innovation Hub that is currently being prepared by participants in the Czech financial sector and fintech sector (Procházka, 2020).This hub should serve as the first Czech regulatory sandbox (Procházka, 2020). In the future, the country’s innovation strategy aims to match the Digital Europe program in co financing the digital innovation hubs that help to introduce digital technologies in factories as well as businesses (DESI, 2020, 11). Currently there are seven of these hubs based in Prague, South Moravia and Ostrava (DESI, 2020, 11). 

Of all Czech citizens using the internet, 78% use the internet for online banking, which is 12% above the EU average (DESI, 2020, 9). Additionally, on integration of digital technologies, Czech Republic ranks 9th among EU countries (DESI, 2020, 10). Furthermore, Czech Republic ranks 22nd in the EU for digital public services (DESI, 2020, 12). 

Czech Republic has a total of55 banks, the largest of which include Česká Spořitelna andČeskoslovenská obchodní banka(Procházka, 2020).

How Does Open Banking Work?

Open banking uses an API that allows financial institutions to exchange financial data, usually through a third party-developed application (Estevez, 2020). These applications are developed by up and coming FinTech companies with the mission to improve digital banking.

To access and use the open banking APIs in Czech Republic, you will need to acquire an account information service provider license, issued by the relevant authority. Furthermore, you will require a relevant certificate (QTSPs or eIDAS), compliant with PSD2 requirements. Alternatively, you can use an open banking platform, such as Nordigen

References

The Balance. (2020, October 11). What Open Banking Is and How It Will Affect You. https://www.thebalance.com/what-is-open-banking-and-how-will-it-affect-you-4173727

Cahill, H. (n.d.).InvoiceFair. The Evolution of Open Banking: Connectivity breeds digital competition. https://invoicefair.com/the-evolution-of-open-banking-connectivity-breeds-digital-competition-081118/

DESI. (2020). Czech Republic.Digital Economy and Society Index (DESI) 2020, 1-13.

Estevez, E. (2020, August 27).Open Banking. Investopedia. https://www.investopedia.com/terms/o/open-banking.asp

Procházka, P. (2020, December).Czech Republic’s banking sector: Facts & Figures. EBF. https://www.ebf.eu/czech-republic/

Tracxn. (2021, June 4).Tracxn. FinTech Startups in Czech Republic. https://tracxn.com/explore/FinTech-Startups-in-Czech-Republic


Banks

Here is a list of major banks providing Open Banking in Czechia

Providers

Here is a list of major open banking platforms in Czechia

Nordigen

Nordigen is an authorised Account Information Service Provider. We provide free access to bank data and premium data insights, using regulated PSD2 connections.


Kontomatik

Kontomatik was founded in 2009. Today Kontomatik is a licensed AISP headquartered in Warsaw, Poland. The company provides screen-scraping and PSD2 connections to bank accounts.