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
Politically the government is committed to increasing the use of this type of online-banking services, in line with the Law on Financial Inclusion.
Obligations and requirements to provide online-banking services described above
Online banking services as described above are not specifically regulated. Therefore, if a service provider renders such type of services (including traditional banking services) it may need to obtain the license of a financial intermediation institution (e.g.: a bank). However, the regulations applicable to financial intermediation institutions will most probably need to be adjusted or re-interpreted in order to adjust to the online banking platform.
On the other hand, in case under the online banking services only e-wallet services and custody of funds services are rendered, the license that may apply to this type of entities would be that of Electronic Money Issuing Institutions referred to in our answers to section f) Legal issues 2).
Lastly, if the app or the online platform is a service rendered on behalf of an entity under the control of the CBU it may be deemed that the same is an outsourcing of services of such entity and therefore an authorization of the CBU would be necessary. Please refer to our answer to question i) Legal issues 2) below.
Additional comments regarding the legal situation for online-banking services or what FinTech’s must be aware of in this business area
Even though there are banking institutions in our country which provide different services online via webs and apps, the concept of a full online bank has yet to appear in our country. Therefore, no actual regulation has been approved to apply 100% to online banks, which results in the application of the regulations regarding regular banks.
Market size for online-banking services and biggest companies in this business area
This market is mainly catered by banks which have developed their own mobile apps and digital platform.
Additional comments regarding the economic situation for online-banking services or what FinTech’s must be aware of in this business area