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Nordic business is leading open banking charge in Europe

Nordic region has the right ingredients to prove open banking can benefit consumers, businesses and the economy

Nordic businesses are leading the way in European open banking, with half of those surveyed recently already offering open banking functionality in their services.

The combination of an advanced digital society and government support makes countries in the Nordics the perfect environment to prove the value of open banking.

A survey carried out by Danish open banking software provider Nordic API Gateway has revealed that three-quarters of businesses operating in the region’s financial services sector have either already made changes or plan to make changes to their services following the introduction of the EU’s Payments Services Directive part 2 (PSD2) last September.

PSD2 enables third parties to access the customer data held by banks via application programming interfaces (APIs), if customer consent is granted, and offer services using this information. For example, a company, with your consent, can take a payment directly from your account without you leaving its website.

These bank-to-bank payments remove fees, do not require customers to have their card, and they are faster than normal payments when people have to go through the bank.

The survey was carried out among senior executives at 100 companies across Denmark, Sweden, Norway and Finland, including banks, payment gateways, accounting systems, lenders and fintechs. The questions were posed a few months after PSD2 became law.

It revealed that 53% of the Nordic companies surveyed have already invested in new technology and infrastructure, and 50% have developed new products and services. 

Rune Mai, CEO at Nordic API Gateway, said the results were a surprise. “It was soon after the launch of PSD2 and the feedback we got was intriguing – 76% of all those asked said they had already implemented or were implementing changes based on PSD2,” he said.

“You normally hear that PSD2 initiatives didn’t really take off, but this research showed the opposite.”

Read more about open banking in the Nordics

Mai puts this down to the Nordic region’s digital maturity and the involvement of governments in encouraging people to use digital services.

“The Nordic region is probably leading the way in developing open banking solutions that matter and are actually adopted by end-users,” he said. “This is largely the result of the digital maturity of the region. We have highly digital banks, and mobile banking has been around for years.

“We also have governments that are highly digitised, with national ID schemes that can be used to log into bank accounts. This has led to higher trust because the government is actually pushing the agenda. Nordic people are very trusting of technology because the government and the banks have helped people understand that technology is good for them.”

Mai said open banking is not much of a shock to Nordic people, even though the terminology might confuse them. “If you asked people what PSD2 is, or open banking, they would have no idea, but if you ask if someone in Finland has paid with a bank account directly online, they will say they have done it for 10 years,” he said.

“Also, if you ask a business owner whether they do open banking, they will not understand, but if you ask them if their accounting system is getting to a place where it is fully automated, they will say yes.”

More than half of the businesses questioned (58%) said PSD2 is already having a positive impact on the region’s economy and 83% said it is an opportunity for them. Nearly half (45%) said consumers will benefit the most.

But the research also found that opening up payment infrastructure and customer data to third parties will change the business landscape in the Nordics. Some 90% expect more tech startups to emerge, 79% believe there will be an increase in the use of artificial intelligence technology, and 88% expect more competition.

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