The UK`s Open Banking Standard applies specificity to many of the principles set out in PSD2 and creates a framework for implementation, including a security protocol. From the beginning of 2017, the UK`s nine largest retail banks had to unify product data from current accounts and retail customers to allow registered third parties to access it. The model agreement was developed by TCH in collaboration with its member financial institutions, non-bank financial institutions and in agreement with fintechs. The model agreement is not mandatory, but it is intended to serve as a reference point for banks and fintechs and, moreover, does not address the commercial terms to be negotiated between the parties. TCH also specifies that the model agreement must be a living document to be updated in order to take into account the evolution of technological and market conditions over time. A key principle of PSD2 is that with the agreement of the account holder, access must be granted to a third party (TPP) to execute instructions on behalf of the account holder. PPPs can take different forms. Account Information Service Providers (AISPs), which include offerings such as Mint in the US, are already able to provide less sensitive information, such as branches and ATM offices, thanks to the UK`s standard open banking. Data sharing is often done through an application programming interface (API), an intelligent line that allows data flow between systems in a controlled but seamless manner (Figure 1). APIs have been used for years in the banking environment (see the sidebar “How Open Banking APIs brings new relevance”).
However, given the advances in advanced analytics and market traction of many fintech non-banking companies, APIs are again receiving increased attention to improve the delivery of financial services to both individuals and business customers. TCH has made considerable efforts to obtain feedback from several parties, including banks, non-bank financial institutions and fintechs. However, the agreement template must be a living document, subject to ongoing changes and updates that may reflect evolving technology and other factors. We encourage feedback that can be useful to improve future releases. Open banking can be defined as a collaborative model in which banking data is exchanged between two or more unrelated parties via APIs in order to offer the market extended functionalities to provide extended functionalities. APIs have been used for decades, especially in the United States, to enable personal financial management software, present billing details on banking sites, and connect developers to payment networks such as Visa and Mastercard. . . .