In September 2019, PSD2 went live in the EEA.The fintech industry is growing rapidly in Spainand major Spanish banks already offer open banking.
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 and was implemented in all EEA countries in 2016 and went live September 2019.
The fintech industry is growing rapidly in Spain with the number of Fintech startups having increased by 15% in the last year to 463 (Garijo, 2021). This increase is dramatic considering just six years ago Spain had only 50 fintech startups (Griffing & Güida, 2020).
The fintech industry in Spain generates more than 12,00 direct jobs with the pandemic spurring digitization and keeping the sector growing (Garijo, 2021). Additionally, on 14 November 2020, the spanish government published the law for a regulatory sandbox, which enables fintechs to test their innovations without the risk of infringing on regulatory requirements (Griffing & Güida, 2020). Furthermore, in July 2019, the Bank of Spain approved one of the first B2B challenger banks, called Neo, which will allow businesses to receive and pay in 30 currencies (Griffing & Güida, 2020).
Of all Spanish citizens using the internet, 60% use the internet for online banking, which is just 6% below the EU average (DESI, 2020, 10). Furthermore, on integration of digital technologies, Spain ranks 13th among EU countries (DESI, 2020, 11). However, Spain ranks 2nd in the EU for digital public services, well above the average (DESI, 2020, 13).
Spain has a total of 196 banks, the largest of which include Banco de España, Santander, and BBVA .
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 Spain, 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.
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). Spain.Digital Economy and Society Index (DESI) 2020, 1-14.
Estevez, E. (2020, August 27).Open Banking. Investopedia. https://www.investopedia.com/terms/o/open-banking.asp
Garijo, M. (2021, March 11).The fintech map in Spain: 15% growth in the number of companies as the lending sector booms. Business Insider. https://www.businessinsider.com/fintech-spain-map-company-lending-money-borrow-growth-boom-tech-2021-3?r=US&IR=T
Griffing, K., & Güida, T. (2020, January 29).What's Driving Spain's Rise as a Fintech Hub. Nasdaq. https://www.nasdaq.com/articles/whats-driving-spains-rise-as-a-fintech-hub-2020-01-29
Tink was founded in 2012, and has built one of Europe’s biggest screen-scraping / open banking platforms – they claim to have broad connectivity and services that create value out of the financial data. Tink offers their platform to banks, fintechs, and startups.
Instantor is a account aggregator and credit analytics company using screen-scraping. They were acquired by Tink in 2020.
Nordigen is an authorised Account Information Service Provider. We provide free access to bank data and premium data insights, using regulated PSD2 connections.
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.
Plaid is a financial services company based in San Francisco, California. The company builds a data transfer network that powers fintech and digital finance products. Plaid's product, a technology platform, enables applications to connect with users’ bank accounts.
TrueLayer is a London-based start-up that helps fintech companies verify accounts and connect their apps to bank data. TrueLayer was founded by Francesco Simoneschi and the company has offices in 5 cities across the world.