In the CEE Fintech Atlas 2019, articles by and interviews with key players in the areas of banking and financial innovation from 19 Central and Eastern European (CEE) countries offer insights into the development of their respective fintech ecosystems. With its focus on Open Banking, this year’s CEE Fintech Atlas also provides an understanding of the local implementation of this approach.
Open Innovation and PSD2
PSD2 and the concept of Open APIs initially shook the traditional banking system. When the directive was issued, the concept of allowing client data to “escape” the secure premises of the bank was hard to accept. At that time, fintechs were seen purely as disruptors and potential threats to the financial services industry. Their solutions were often perceived by customers as cheaper and easier to use than those offered by traditional banks. There was a feeling that this new kind of competition would become even more aggressive towards banks by leveraging the advantages derived from PSD2. However, regulators have demonstrated great progress in developing official guidelines on sharing sensitive data and establishing a standardised and secure way of doing so via APIs. Due to the security ensured by API standards, banks have shaken off their initial reluctance about sharing data.
Customer demand is driving the quick pace of change. Partnering with fast-developing, bold fintechs allows banks to leverage smarter and more flexible solutions that end customers can benefit from. Fintechs have changed their role from disruptors to facilitators and enablers of a revolutionary banking transformation. Furthermore, in CEE and even in countries not regulated by PSD2, the market offers many examples of corporations and traditional financial institutions seeking help and partnering with fintechs.