In September 2019, PSD2 went live in the EEA. Mobile payment solutions are becoming increasingly popular among Nowegians and their major 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, was implemented in all EEA countries in 2016 and went live in September 2019.
In Norway, mobile payment solutions are becoming increasingly popular. Due to the increasing amount of people using online banking services, the number of physical branches is decreasing significantly (Cook, 2020).
In 2019, Norway’s Ministry of Finance launched a regulatory sandbox to support the growth of fintechs in Norway. The aim of the sandbox is to close the existing innovation gap between Norway and its neighboring Nordic countries (O'Dwyer, 2019). Furthermore, the sandbox offers a low-cost and risk free environment to test technologies and services, driving innovation that could reshape financial services (O'Dwyer, 2019).
Of all Norwegian citizens using the internet, 97% use the internet for online banking, which is 31% above the EU average (DESI, 2020, 6). The increase in digital banking has resulted in large productivity gains and lower costs for the norwegian banking sector (Cook, 2020). In 2019, the cost/income ratio was on average 44% (Cook, 2020).
Norway has a total of119 banks, the largest of which being Nordea, Danske bank and DNB (Cook, 2020).
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 Norway, 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/
Cook, M. H. (2020, December).Norway’s banking sector: Facts & Figures. https://www.ebf.eu/norway/
DESI. (2020). Norway.Digital Economy and Society Index (DESI) 2020, 1-8.
DNB. (n.d.).New regulatory framework for payment services. DNB. https://www.dnb.no/en/business/transaction-banking/cash-management/articles/psd2.html
Estevez, E. (2020, August 27).Open Banking. Investopedia. https://www.investopedia.com/terms/o/open-banking.asp
Statista Research Department. (2020, November 2).Online banking penetration in Norway 2005-2019. https://www.statista.com/statistics/380892/online-banking-penetration-in-norway/
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.
Nordigen is an authorised Account Information Service Provider. We provide free access to bank data and premium data insights, using regulated PSD2 connections.