Open Banking API Standards: The Race To Beat Elon Musk To Mars

As a humble developer, I have been trying to get up to speed on the state of play with Open Banking and PSD2 API standards and timelines. 

Here is what I have found.

Plenty of Standards To Choose From

The good news is there are several initiatives underway across Europe to define standards. The bad news is that it is looking unlikely there will be a single European standard in the short term.

The UK are already off and running and have produced a standard for the 9 largest banks. 

The Berlin Group is a consortium trying to build a Pan European standard. 

They have drafted a proposed standard and are now going through a further period of ‘pan European’ consultation. This may ultimately lead to an agreed European approach minus the UK.

France (STET) has defined a standard, but they are also members of the Berlin Group. Therefore the question has to be asked, why?

In the absence of a ratified ‘pan European’ standard, some European banks are already implementing their own standards. It remains to be seen if they will make changes to realign with any of the above standards.

Developers Continue To Scrape

Whilst all of this is still happening, Open Banking APIs are few and far between. In their absence, Fintechs and developers are continuing to build screen scraping solutions to aggregate bank accounts. 

However, to put a another nail in the developers coffin, the regulators are threatening to ban screen scraping and these efforts could prove futile. This may not be an issue during the PSD2 implementation window expected to end Q2 2019.

Timelines

The current timelines for the UK CMA9 and the wider PSD2 implementation are as follows: 

• October 2017: Enrolment is open for Account Servicing Payment Service Providers (ASPSPs), Account Information Service Providers (AISPs), and Payment Initiation Service Providers (PISPs) to register for access to the UK Open Banking ecosystem.
• Q4 2017: Final Regulatory Technical Specification (RTS) published and 18 month window for implementation begins.
• January 2018: PSD2 regulation comes into effect and the UK read/write APIs become available.
• January 2018 to February 2019: European banks are mandated to allow access to customer data, but this can be achieved by continuing to permit screen scraping if it remains legal.
• Q2 2019: RTS goes into effect and APIs , two-factor authentication, etc needs to be in place.

Summary

There is unlikely to be a single European Standard for Open Banking APIs in the short term. The best we can hope for is a European standard and a UK one.

Elon Musk’s vision to land humans on Mars by 2024 may happen before a single European standard is agreed. 

The UK may be up and running with Open(ish) Banking for customers before the Berlin Group finishes the ratification of a ‘Pan European’ standard.

Developers using screen scraping may come unstuck if the practice is banned. A prolonged wait (Q2 2019) for European bank API replacements could leave existing customers of their apps in limbo.

In the short term, developers need to focus on design flexibility, work with what is available and be careful about putting all of their eggs in one basket with screen scraping.

Open Banking Developers Europe LinkedIn Group

To help unite the Open Banking Developers of Europe and connect them with regulators, banks and suppliers, I have setup a new group on LinkedIn. It would be great if you could join in and contribute to the knowledge sharing and discussions. Click here to join.