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FinTechs belonging to this area offer traditional banking services in a modern way, usually through online services or mobile applications as well as ancillary services – e.g. enabling customers to manage their giro- or custody-accounts online and in real time or offering e-wallet services. Keywords in this context are also API-Banking or Banking as a Service (BaaS)/ Bank as a Platform (BaaP).
API-Banking:
API stands for application programming interface and is offered to access data banks and to extract and insert information. API-Banking consequently means the access to data banks of banks to offer new and innovative banking applications.
Through these services FinTechs offer services with new functions, e.g. enabling customers to manage their accounts online and in real time.
BaaS – Bank as a Service/BaaP – Bank as a Platform:
The API-based Bank as a Service platform has a full banking licence, but merely serves as the back end for standalone independent FinTechs, which “use” the licence and the back end of the bank to offer new financial services, launch additional financial products or expand into additional markets.
Introduction
Attitude of the country towards online-banking services
Online banking services are broadly utilized in Bulgaria. In recent years, online banking services have developed considerably. Online tools provide a high level of data protection, a vast variety of services (from account management and bank transfers to loan and deposit services), diversity of platforms and access devices, becoming the preferred banking tool for consumers and commercial users.
The penetration of EU-based online banking platforms in the national sector, with the biggest credit institutions being mostly EU-based corporations, rushed credit institutions to develop their online banking services, making them one of the most digitalized financial sectors in Bulgaria, some institutions operating even exclusively online.
Legal affairs
Obligations and requirements to provide online-banking services described above
The Credit Institutions Act (CIA) and the Payment Services and Payment Systems Act (PSPSA) being the main national regulations, EU regulations, such as Regulation (EU) 575/2013, PSd2 shall be also complied with. A considerable number of specific regulations such as the Bank Bankruptcy Act, Ordinance 10/24.04.2019 on the organization, the management and the internal control in the banks, apply as well. The AML regulations shall also be abided by the banking service providers.
The banking activity is subject to licensing; the license being provided by the supervisory authority – the Bulgarian National Bank (BNB). In order to acquire a banking license, the legal entity has to comply with initial capital and funds requirements and the good standing requirements, set forth by Regulation (EU) 575/2013, the CIA and relevant national Ordinances.
The licensing fee is BGN 100,000.00 (approx. EUR 51,000.00).