In September 2019, PSD2 went live in the EEA. The Romanian fintech market has grown exponentially and Romanian 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.
The fintech market has grown exponentially with 135 fintech startups currently in Romania (Tracxn, 2021). Romania has three hubs for digital innovation and, in January 2020, 16 fintech companies came together and founded the Romanian Fintech Association (Cristea, 2021). However, the country still has some way to go.
Romanian does not have a national digital transformation strategy but supports the ecosystem of startups through Start-up Nation, a program that helps startups with their innovations and integrations (DESI, 2020, 12). Furthermore, Romania is a member of the EuroHPC Joint Undertaking however the country has not yet provided any formal financial commitment (DESI, 2020, 12). Regarding blockchain, the National Institute for Research and Development in Informatics has been active since 2017 in the development of emerging digital technologies (DESI, 2020, 12).
Of all Romanian citizens using the internet, 11% use the internet for online banking, which is 55% below the EU average (DESI, 2020, 10). Additionally, on integration of digital technologies, Romania ranks 24th among EU countries (DESI, 2020, 11). Furthermore, Romania ranks 28th in the EU for digital public services (DESI, 2020, 13).
Romania has a total of 71 banks, the largest of which include BRC and BRD.
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 Romania, 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/
Cristea, M. (2021, Febuary 5).Romania, on the European Fintech map based on investments. Business Review. https://business-review.eu/money/finance/romania-on-the-european-fintech-map-based-on-investments-217023
DESI. (2020). Romania.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
Tracxn. (2021, June 4).FinTech Startups in Romania. Tracxn. https://tracxn.com/explore/FinTech-Startups-in-Romania
Nordigen is an authorised Account Information Service Provider. We provide free access to bank data and premium data insights, using regulated PSD2 connections.