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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
Finland has a highly developed online banking system, with almost universal access to digital financial services. Finnish banks offer secure, user-friendly platforms for managing finances, payments and investments. Strong cybersecurity measures and the widespread use of mobile banking apps contribute to the efficiency and trust in the digital banking environment. In recent years, online banking has increasingly replaced traditional services.
In recent years, the FIN-FSA has focused on ensuring the security of mobile and online banking, combating payment service abuse and improving compensation procedures. A thematic assessment was conducted to review how banks deal with payment service abuse, particularly in relation to consumer customers and compensation procedures
Legal affairs
Obligations and requirements to provide online-banking services described above
To provide online banking services in Finland, financial institutions must meet the same authorisation requirements as traditional banks. First, they need to apply for authorisation to the FIN-FSA, along with all necessary supporting documents. The applicants shall consult with the FIN-FSA beforehand to ensure smoother application process.
The authorisation is granted by the European Central Bank based on the FIN-FSA’s assessment of the application. The FIN-FSA aims to propose a decision within four months of receiving the application, with a final decision required within twelve months if all necessary information is provided.
Once authorisation is granted to the applicant, the FIN-FSA ensures that the institution is registered in the Trade Register. Banking services cannot be provided until this registration is complete. Additionally, after authorisation, the FIN-FSA notifies relevant bodies such as the Deposit Guarantee Fund, the Investor Compensation Fund, and the EU Commission, depending on the types of services offered.