Body
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 is deemed established in the Czech market. For several years, most of the banks have been shutting down their counter branches, relying more on the clients’ ability to handle their requests remotely. This makes it more important for developers to focus on internet banking and mobile phone applications. These need to meet the latest trends, be intuitive and adapt as much as possible to the clients’ wishes, or better still, anticipate their wishes, and at the same time provide the necessary level of security.
On the other hand, although PSD2 was a big topic several years ago, the popularity of the TPP services pursuant to PSD2 among the general public has not yet reached the anticipated level. Also, there is no significant presence of BaaS or BaaP services.
Legal affairs
Obligations and requirements to provide online-banking services described above
Only a joint-stock company that has obtained a license under the Czech Banking Act (Zákon o bankách – “ZoB”) may operate as a bank in Czechia. The first step in obtaining a license is to apply, which must contain the requirements set out in the ZoB and the relevant associated regulations (both Czech and EU – e.g. CRR, CRD etc.).
Branches of foreign banks, which are organizational units of these banks, may also operate in Czechia. Foreign banks from countries outside the European Union also need a license to operate. The procedure for issuing a license is similar to that for banks. In this case, a statement from the banking supervisor of the country where the foreign bank's head office is located is also required, and the CNB's banking supervisor cooperates with the foreign regulator when assessing the application.
Acceptance of an application for a banking license for a bank with its registered office in Czechia is CZK 200.000. The same administrative fee applies to a foreign bank with its registered office in a Member State of the European Union for other intends than to establish a branch in Czechia.
Additional comments regarding the legal situation for online-banking services or what FinTech’s must be aware of in this business area
Given the level of harmonisation in this area of law, it is no surprise that many Czech regulatory requirements are based on EU law or are influenced by EU-wide developments. Anti-money laundering and data protection regulations are also to be complied with.
Economic conditions