In September 2019, PSD2 went live in the EEA. Finland is an internationally recognised fintech huband 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 and was implemented in all EEA countries in 2016 and went live in September 2019.
Finland is an internationally recognised fintech hub with a lot of activity saturated around Helsinki (IBS Intelligence, 2020). The amount of fintech companies is increasing yearly with around 190 fintechs in 2020, 50% of which being founded in 2014 or later (Helsinki Fintech Guide 2020, 2020, 5).
Finnish fintechs benefit from a steady business environment, digital literacy, strong cybersecurity and frameworks in open source, data and API (IBS Intelligence, 2020). These conditions combined with a strong ecosystem around technology startups makes Finland an ideal operational environment for fintech (IBS Intelligence, 2020).
Of all Finnish citizens using the internet, 95% use the internet for online banking, which is 29% above the EU average (DESI, 2020, 9). Furthermore, online banking is gaining popularity among senior citizens. According to Finance Finland’s survey conducted in 2017, more than 80% of the users aged 65-74 years tend to use online banking (Finance Finland, 2019). Additionally, on integration of digital technologies, Finland ranks 2nd among EU countries (DESI, 2020, 10). Finally, Finland ranks 4th in the EU for digital public services (DESI, 2020, 12).
The Finnish banking sector is dominated by four major banks: OP Financial Group, Nordea, Danske Bank and Municipality Finance. These banks hold 80% of the total market share (Manninen, 2018).
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 Finland, 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). Finland.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
Finance Finland. (2019, February 13).Finns leading online banking users in Europe. Finance Finland. https://www.finanssiala.fi/en/news/finns-leading-online-banking-users-in-europe/
Helsinki Fintech Guide 2020. (2020). Helsinki Fintech. https://www.helsinkifintech.fi/wp-content/uploads/2020/06/Helsinki-Fintech-Guide-2020.pdf
Helsinki Times. (2019, December 12).What Are Finland’s Most Popular Online Payment Solutions?Helsinki Times. https://www.helsinkitimes.fi/business/17093-what-are-finland-s-most-popular-online-payment-solutions.html
IBS Intelligence. (2020, December 22).4 notable Finnish FinTech companies to watch out for in 2021. IBS Intelligence. https://ibsintelligence.com/4-notable-finnish-fintech-companies-to-watch-out-for-in-2021/
Manninen, H.-M. (2018, January 15).PSD2 implemented in Finland. Dittmar & Indrenius. https://www.dittmar.fi/insight/articles-di-finance-capital-markets-alert-15-jan-2018/
Niinimäki, E. (2020, December 2).Online banking penetration in Finland 2005-2019. Statista. https://www.statista.com/statistics/560631/internet-usage-for-online-banking-services-by-age-group/
Somerla, M. (2020, December).Finland’s banking sector: Facts & Figures. EBF. https://www.ebf.eu/finland/
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.
Suomen Asiakastieto is a digital business and customer information service provider in Finland. They gather and translate data and information into analyzed data models and observations for use in interactions between individuals, businesses, and society.