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Czech Republic
Showing how to do Open Banking safely
Skyline of Prague, Czech Republic Petr Gaba, Product Manger of Trask
What are the key prerequisites for Open Banking success and what opportunities does PSD2 offer? An interview with Open Banking expert Petr Gaba, product manager for the Bank APIs Aggregation Platform (BAAPI) of Trask, a provider for API infrastructure.
How would you describe the relationship between
the Czech banking environment and the opportunity known as PSD2?
Gaba: Czech banks approached PSD2 very responsibly.
The big players all invested heavily in developing their own API channels, as a result of which none use screen scraping and therefore have to take the associated risk of sharing bank credentials. Data formats are extremely important and define the level of trust in any process; PSD2 ensures that sensitive data is handled securely.
The EU’s General Data Protection Regulations (GDPR) now set a global example and the Czech Republic is leading the way with safe, GDPR-based Open Banking that is trusted by all sides. Last but not least, the country’s strong tradition of early adoption is allowing it to unleash the maximum potential of PSD2.
Which key factors determine the success of Open Banking and what is the state of these in the Czech Republic? Gaba: There are three prerequisites for the translation of
Open Banking into economic growth. The first is the successful integration of PSD2. The second is that it must be adopted by enough players, not all of whom must be fintechs. Currently only five non-banking entities hold a Czech licence, but the Czech National Bank (CNB) process for awarding these licences is becoming more transparent. The third prerequisite is technological: the continuous development of APIs by banks is accompanied by a costly integration process. We help to overcome this barrier with
our BAAPI, a platform offering a single data interface for access to any bank in several CEE countries.
Some predicted that customers could also be a barrier to Open Banking. This has not been borne out by the Czech market, which is second in the EU in terms of API transactions. The Czech population constantly shows itself to be technologically educated and open to innovation. This can be seen in the
quick adoption of contactless payments or the success of local fintechs such as Roger or Zonky.
Which local fintechs would you highlight as making
the best use of PSD2?
Gaba: Besides those mentioned above, companies such as Spendee and GoPay. Our fintech scene is pretty colourful so
we have a very interesting list of success stories. As some are still focussed on local markets I believe that the biggest opportunity offered by PSD2 is the quick, simple and relatively cheap export of their ideas. Given that the directive is suited to players who export innovations after proving them on local markets I’m convinced that the greatest Czech PSD2 successes are yet to come.
What will be the future role of the Czech Republic in Open Banking?
Gaba: That depends on various factors. One trend will be leveraging between licensing and passporting, which could lead to a certain type of competition between European regulators. And there are still many opportunities in the financial advisory, real estate and insurance sectors and corporate banking,
whose development is essential because growth is driven by the variability of the use cases of local players. The Czech Republic can be a leader, but sectors that already use digital solutions must be encouraged to innovate even more. As “mobility” is such a national passion, Czech customers are ready.