It has been a full month since PSD2 officially came into effect on the 14th of September. This means that the foundation has been laid for a transition towards open banking. An excellent moment to take a look at the developments in the Dutch open banking market so far.


 

TPP licenses

The open banking transition has officially kicked off with the first seven PSD2 licenses being granted to third party providers (TPPs) registered in the Netherlands. With at least 171 licenses issued in Europe, this puts the Netherlands in the low/mid range of license issuers. Three out of these seven companies received both a license for payment initiation (PISP license) and for access to account information (AISP license), whereas four were granted AISP capabilities only. 
The companies with only the AISP license are active in fields, as shown below. The parties with a PISP license offer services for payments, multi-banking and consumer-investing respectively.



Besides the seven granted licenses, there have been at least seven official applications which are currently under review by the Dutch central bank (DNB). 
 

API connections

As of the 14th of september, banks are required to have their PSD2 APIs available for usage. These allow third parties to make use of services like payment initiation and account information with live transaction data. All the banks are shown to have at least their payment initiation and account information APIs in production. The developer portal of Knab does suggest that its APIs can only be accessed in non-production, but they opened their APIs to multiple business partners in production. 

When it comes to connecting to the available APIs, only a limited number of TPPs are using the production APIs and most parties are still working in a testing environment. This is further emphasised by the fact that even the large banks have yet to connect to each others’ APIs. The exception is ABN Amro that since June allowed users to connect account information for accounts from Rabobank, De Volksbank and ICS, recently also adding ING.

Additionally, there has been no party so far that is offering a single ready-to-use API for all Dutch banks. Multiple parties are however in the process of aggregating the available APIs.
 

Developer portals

ING; Rabobank; ABN Amro; De Volksbank; Moneyou; Triodos; BunqKnab

 

Propositions

There has been no definite spur in new propositions based on open banking. From industries such as insurance, mortgage, lending or retail - where examples fo open banking initiatives have emerged in other countries  - no initiatives have been released to the public market. A handful of pilots between financial institutions and fintech companies have emerged in the field of mortgage application as well as in the insurance industry. The Dutch open banking market can thus be considered still in very early stage, making it hard to project its direction. As APIs are still opening up to a larger public and more TPPs are yet to be issued a license, it is not expected that a spur of new propositions will emerge over the coming months. 

Nonetheless, a related development driven by multi-banking can be recognised in banks increasingly marketing money management solutions (such as categorisation of expenses) in their digital apps. It suggests that money management solutions are likely to become a commodity at least to a certain extent. ABN Amro and Rabobank took the first steps of multi-banking, but initial examination showed that there is no functionality offered besides listing account information.

As a result, we can conclude that the developments so far have been focussed mainly on compliance and meeting technical requirements. Although the market has yet to settle when it comes to new propositions, the market is definitely moving and preparing for an innovative transition.
 

Curious about the full potential?

Open banking enables many opportunities both within and outside the financial sector. The notion that the Dutch market is young also means that companies can now take the steps to become a frontrunner in open banking. 

Bittiq has experience with developing open banking strategies that match consumer demand. Feel free to reach out if you want to explore the potential of open banking within your company.