NBU approved the concept of open banking in Ukraine
MOSCOW. Aug 14 (Interfax) - The National Bank of Ukraine has approved the Open Banking Concept, which defines the areas for development and a roadmap for the introduction of an application programming interface or API in Ukraine as a platform for data exchange between payment service providers.
"The introduction of open banking in Ukraine will benefit the financial services market. In particular, it will contribute to the development of fintech, the introduction of innovations in the payment sector, increased competition and, as a result, improved quality of existing and creation of new payment services and products," Ukrainian media quoted Alexei Shaban, deputy NBU governor, as saying in a statement.
Open banking involves a structured and secure data exchange between payment service providers through open APIs.
"We are looking at the development of a new ecosystem based on the application programming interface and designed to develop payment products and services that are more diverse and attractive to customers," the National Bank said.
The regulator said that according to the Law on Payment Services, open banking must begin in Ukraine in August 2025.
Open banking envisages that banks and other payment service providers that service accounts must open their own APIs for non-financial payment service providers with the ability to connect to their service interfaces in order to gain access to user account information and initiate payment transactions.
In open banking, only the user - an individual or legal entity - decides who should get access to their account and to how much information.
The National Bank says the key advantage of such an exchange is the opportunity for users of financial services to choose a convenient and modern way to use their accounts, and for businesses to establish mutually beneficial cooperation and receive more opportunities to develop their solutions. The NBU says that with the help of open banking, users will be able to manage their funds on the account more effectively, consolidating information on the movement of funds and their balance on their accounts opened with various financial institutions in one payment application.
Unlike traditional banking, open banking relies on a technological network of financial institutions and other non-financial payment service providers to enable them to exchange information effectively with the user's prior consent.
"Thanks to open banking, the payment market will be transformed, encouraging fintech companies. New opportunities will arise to develop and scale the ecosystem, and competition among participants in the payment market will increase. At the same time, the regulator will ensure a high level of protection of user rights and data security," the regulator said.
The National Bank will determine the basic principles of open banking and areas for its further development according to the market's pressing needs, as well as take care of the legal regulation of its work and oversee the compliance of payment service providers with its requirements.
Technical specifications will be approved by the regulator based on joint solutions with market participants.
According to the concept implementation roadmap, NBU working groups developed the first version of the technical specifications in December 2022 - February 2023. The regulator will approve the first version of the specifications for testing in Q4 2023.
There are plans in Q1 of next year to set down requirements for stakeholders, in particular general approaches to the supervision and protection of user rights, IT security, protection of personal data of users, as well as to form a list of regulatory and legal acts and conceptual amendments and determine a legal pilot base.
Then, in March-June 2024, the regulator plans to prepare for and conduct a first stage of testing for a limited range of APIs and analyze it, identify areas where these specifications can be refined and then draft a second version of the technical specifications.
The NBU will in the second half of 2024 conduct a second stage of API testing, with a wider range and circle of participants, as a result of which the second version of the specifications will be prepared. Also, by the end of next year, regulatory legal acts should be approved, including on authorization, and to finalize the register of payment infrastructure and procedure for open banking and technical specifications.
