Online banking services
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 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.
Attitude of the country towards online-banking services
An N26/Accenture study in 2021 surveyed more than 47,000 banking customers in 28 markets: Digital banking adoption is expected to grow to about 70 % in the future, meaning a potential market size of 1.4 billion customers. Ireland was reported as having the greatest level of trust in digital banking in Europe and has recorded one of the fastest adoption rates globally over the past few years, according to a new study.
Obligations and requirements to provide online-banking services described above
One of the main aims of PSD2 was to increase competition in the payment sector, introduce open banking and facilitate access by third party providers to a user’s account held with their account servicing payment service provider (usually a bank).
Additional comments regarding the legal situation for online-banking services or what FinTech’s must be aware of in this business area
Market size for online-banking services and biggest companies in this business area
The N26/Accenture study reported some 68% of Irish banking customers have trust in digital banking, with estimates of up to 51% of the population open to digital only banking ie approximately 2.6m people. Revolut is reported to have approximately 1.3 million users with N26 reported as having approximately 200,000. Revolut recently launched its services as a credit institution in Ireland broadening its services to now include offering deposits under an licence obtained from the European Central Bank. Starling Bank is reported to be seeking a banking licence as part of its European expansion plans.
Additional comments regarding the economic situation for online-banking services or what FinTech’s must be aware of in this business area
With the recent announcements of the exit of Ulster Bank Ireland Limited and KBC Bank from the Irish market, there are opportunities for FinTechs in the Irish market. FinTechs like N26 and Revolut are already active in the market. Revolut is reported to have around 1.3 million users in Ireland, while N26 has around 200,000 users currently with Starling Bank in the process of establishing itself here in Ireland as well.