PSD2 and Open Banking - the opportunity for developers

PSD2 and Open Banking - the opportunity for developers!

As a developer, how familiar are you with the UK’s Open Banking or Europe’s PSD2 initiatives? What are the opportunities these changes bring for those with innovative ideas in the world of fintech and you as a developer of Fintech?

For most developers the answer might be ‘not so familiar’. But we think you should be. Open Banking presents a great opportunity that some observers believe will change the face of banking.

Opening up the financial market for new solutions

The goal of the EU’s ‘PSD2’ directive is to create a safer and more innovative European payments landscape. The legislation is complemented by the UK’s Open Banking initiative, mandated by the Competition and Markets Authority (CMA), designed to increase competition in banking and lower the barriers to entry. Essentially, these changes will allow customers the option to share their bank account data securely with ‘trusted third parties’ through Open APIs. Trusted third parties can then access this data to create new insights and innovations for customers based on their transaction behaviour.

This opens up the banking market to a host of new competitors and also paves the way for increased collaboration with all types of organisations – from industry giants such as Amazon, to niche solution providers offering complementary services.

In the UK the nine largest banks have already been told to open up access to customer data to licensed fintechs. Other countries worldwide are also mandating a similar approach.

At the same time banks are faced with a range of other challenges, including the need to:

  1. Deliver real time transactions
  2. Digitise front and back-end systems and processes
  3. Connect their systems to a wider ecosystem through Open APIs
  4. Incorporate Distributed Ledger Technology (DLT) or Blockchain – seen by many banks as game changing technology
  5. Move areas of their business to the Cloud: to reduce hosting fees, be safe & secure, provide hardware support and maintenance that can scale
  6. Innovate and improve customer service using Artificial Intelligence

It’s clear to everyone that banking is undergoing a wave of disruption – and this throws up a range of opportunities for the developer community.

How can developers capitalize on the opportunity?

To help developers take advantage of these changes Finastra is opening up its core systems to developers from banks and fintechs – based on a platform-as-a-service (PaaS) approach – making it easy to develop applications on top.

Why should developers from banks and fintechs be interested in building applications on the Finastra platform? What’s in it for you exactly?
Traditionally, onboarding a fintech’s technology and integrating it with the bank’s architecture can take an inordinate amount of time, somewhat defeating the object of a fintech’s business model. Finastra’s platform significantly speeds up the time to market for developers in banks and fintechs. The platform greatly facilitates collaboration between banks and fintechs.

At the heart of this proposition is the access that developers can get to the 10,000 banks that Finastra already serves. To put this in context the Finastra ecosystem handles:

  • Up to 10% of daily trade finance
  • 25% of US wire payments
  • $5T of assets under management
  • Up to 25% of all U.S. Financial Institutions
  • 175m+ retail accounts
  • Up to 8% of daily fix trading
  • 43% of total syndicated loans
  • 30% of UK faster payments

What tools and services can developers expect to find?’s technology is cloud-native and hosted on Microsoft Azure. It includes the following:

  • Open standards connectivity
  • Big data set aggregations
  • Native parallel processing support (GPU)
  • DevOps
  • Super-fast in-memory calculations
  • Fusion Fabric connect integration
  • Microservices

FusionFabric.Cloud is a full-service platform to buy, run, distribute, develop and customize applications. It encompasses three stages that include: FusionCreator (a low code tool that can quickly and easily enable the build of apps, FusionStore (a digital shop front to distribute and monetise the apps) and FusionOperate (to test and host on Microsoft’s Cloud offering Azure).

The platform is being launched at Money2020 in Amsterdam including the FusionCreator, FusionOperate and FusionStore – we’d love you to come and start to use the tools and give us your feedback.

Mitesh Soni is a Senior Director of Innovation and Fintech at Finastra, the world’s third largest financial technology company. He is a global banking industry expert with more than 20 years’ experience driving business transformation, digital disruption, and business model redefinition. He has spent a number of years in the risk management and trading technologies space holding a Financial Risk Manager qualification from the Global Association of Risk Managers. Previous experience includes roles at HSBC, Deutsche Bank, Morgan Stanley and many others. He is also an investor, advisor and Fintech mentor with an active interest in building fintech community ecosystems. He is passionate about digital transformation, innovation and disruption through partnerships and creative investment strategies.