5 innovative FinTechs in the European open banking ecosystem

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Since the introduction of the EU’s Second Payment Services Directive (PSD2) in January 2018, open banking has revolutionised the way millions of people manage their finances and use their data.

The ability to access all your accounts and integrate non-banking financial services too has proved increasingly popular over the last few years, with the likes of FinTech giants Monzo, Revolut and Starling all offering some form of the technology.

Here are 5 significant FinTechs in the European Open Banking space –

1. TrueLayer

Financial API provider TrueLayer recently collaborated with Freetrade in a bid to deliver enhanced investing experience using Open Banking to around 200,000 of its customers.

Founded in 2016, TrueLayer’s API technology has been integrated by the likes of peer-to-peer lender Zopa, renting fintech Canopy, AI assistant Plum and digital bank Monzo as well as most of Europe’s major banks. The FinTech aims to offer secure, global access to financial infrastructure as well as facilitate payments in real-time.

Recently, new research by TrueLayer has revealed that the use of Payment Initiation grew around 832% between March and July in the UK. The majority of the growth, i.e., around 88% was from people with bank accounts held at traditional financial institutions such as Lloyds or Barclays. 12%of growth came from account holders at challenger banks such as Monzo and Revolut.

TrueLayer is available in the UK, Europe and Australia.

2. Tink

Stockholm-based open banking solutions provider Tink recently announced the acquisition of credit decision solutions provider Instantor, in a bid to facilitate its European expansion. Tink is expected to leverage the acquisition for boosting its product offering and market position in Europe.

Founded in 2012 by Daniel Kjellén and Fredrik Hedberg, Tink is now offered in 17 markets across Europe and Latin America.

Tink also announced an extended commercial agreement with PayPal, thus including all the countries within the European Economic Area (EEA). Tink supports PayPal’s PSD2 and open banking activities across Europe. The open banking platform has stated that the extended commercial agreement is supported by a second strategic investment undertaken by PayPal in Tink’s €90 million investment round, held in January 2020. Earlier, PayPal also took part in Tink’s first investment round announced in June 2019.

Tink integrates with more than 2,500 financial institutions, reaches over 250m customers and processes more than 10bn transactions a year.

3. Deposit Solutions

Established in 2011 in Germany, FinTech unicorn Deposit Solutions allows banks to offer attractive third party deposit products to their own customers through their existing accounts. It has offices in Hamburg, Berlin, London, Zurich and New York and has local presences across Europe.

A recent analysis by the FinTech Deposit Solutions has revealed that Europeans hold more money in their current accounts as compared to before, with the current account volume in the Eurozone reaching a record high in April 2020, doubling since 2013. The analysis stated that 50% of the money on Eurozone bank accounts is in non-interest-bearing current accounts instead of an interest-bearing overnight deposit, fixed-term deposit, and savings accounts.

Deposit Solutions offers an Open Banking platform for deposits. Its Open Banking technology aims to provide an infrastructure for the global $ 50 trillion deposit market that benefits banks and savers alike.

4. Yolt Technology Services

Open banking arm of the financial management app – Yolt, Yolt Technology Services was launched in September 2019 in Amsterdam.

Yolt Technology Services (YTS) was recently selected by Dutch accounting software provider, Jortt in a bid to leverage the former’s API technology to boost its services. The partnership furthers YTS’ aim of supporting businesses to use open banking technology to increase business efficiency, reduce cost and enhance the front end-user experience.

Both Yolt and Yolt Technology Services are a venture of the Dutch bank ING.

Yolt Technology Services recently reached around 80 per cent coverage of bank accounts in Italy, France and Spain following the addition of new APIs to its service and already hit 95 per cent API coverage in the UK and 90 per cent in the Netherlands.

5. Nordic API Gateway

Nordic API Gateway is a Nordics open banking platform provider. Through one API, it aims to simplify access to aggregated financial data with the extensive coverage of both personal and business bank accounts in the Nordics.

Recently, Nordic API Gateway announced a new partnership with a Nordic bank, Resurs Bank, in a bid to develop customer-centric solutions through account aggregation and payment initiation, thus boosting customer experience. The Bank leverages its access to financial data and account-to-account payments provided by the open banking platform for enhancing customer experience across the Nordics.

The FinTech empowers a wide selection of companies, including Danske Bank, DNB, Jyske Bank, OP Financial Group, and Pleo, among others, and plans to announce upcoming partnerships with new tier 1 banks in the region soon.

Nordic API Gateway announced the addition of challenger bank Lunar to its list of Nordic banks already taking advantage of the open banking technology to create value-added, multi-banking features. The partnership is said to enable Lunar to take an important step in becoming the primary banking interface for more than 170,000 users.

READ MORE: Open Banking Roadmap for Mid-sized banks in Europe by IBS Intelligence