Last year when Apple acquired UK open banking startup
Credit Kudos there was a lot of speculation on how Apple was going to use the open banking data technology.
Frankly I’m quite excited to see Apple use it to advance their financial health tracking capabilities.
With the bank account data APIs now being available across Europe, I hope we’ll see Apple roll this out in more countries.
The article does not mention this, but much of the fraud can be removed by switching to bank payments (eg open banking payments) or by using the likes of BNPL.
It’s nuts how much effort goes in to trying to make credit cards work for the internet when they clearly were made to serve a different purpose.
Nordigen is an open banking platform - we help fintechs to connect to consumer and business bank accounts in Europe for banking data. We're a team of 100 people based in Riga.
Depends.
There's a bunch of providers (eg Yodlee) that ask for bank credentials (previously on HN https://news.ycombinator.com/item?id=18655712)
Akoya in US and most European providers use real bank APIs.
Shameless plug: OP mentioned Plaid as a way to sync bank accounts, but if anyone wants to use a Plaid alternative in Europe, check out Nordigen (it's free).
Open banking (the actual regulated type in UK and EU) replaces (1) the need to rely solely on credit bureau data to understand someone's creditworthiness, which is often faulty or incomplete (2) the need to share paper/PDF bank statements (3) the need to share banking credentials with tech companies that do "open banking powered by screen scraping".
Because open banking is regulated, consumers now have a layer of protection that they didn't have before. And more people can prove their actual creditworthiness (as opposed to whatever credit bureaus think their creditworthiness is).
Full disclosure: I'm a cofounder of Nordigen, a freemium open banking platform. Views biased.
Congrats on the launch - what you've built is incredibly cool.
When do you plan to add European investment accounts?
I cofounded Nordigen (Plaid competitor in Europe) and we use PSD2 bank connections, which are great for payments data but do not cover investment data, which is less than ideal. Aggregating OAuth APIs for European brokerages would make so much sense.
"It uses a novel underwriting process, which links with a user’s bank account to determine credit limits based on cash flow."
Uses Plaid: https://x1creditcard.com/legal/privacy
Actually, the article uses "open banking" correctly in this case. The author believes that if all banks used open sourced tools for exposing their data via APIs (as opposed to building everything from scratch), we'd have more connectivity - which is true.
In Europe, for example, there's 6,000 banks and there's at least thousand different interpretations of what is a PSD2-compliant API, which makes connectivity hard - you have to use an API aggregator to connect to all these APIs (unless you want to connect to each API separately). If they all just used open source libraries, we'd have less APIs to connect to, which means better connectivity.
I wonder how this could work in practice. A Gov entity will have to connect to some bank APIs to streamline the monitoring? Most banks don't have APIs to connect to. It would pretty wild if the Gov had to ask people to share their bank passwords and then had to screen-scrape the data from their accounts to "establish a connection".
Exciting to see Israel potentially joining the list of countries where open banking is regulated. PSD2 (Europe's open banking law) has made a lot of things in Europe much simpler, like being able to transfer account data from your bank to any third party app. And the bank APIs are free, which is amazing for developers and fintech startups.
Australia and Brazil are also now following this direction with their own open banking implementations.
Regarding "1. Download transactions from your bank" - to avoid having to deal with PDFs, it's possible to use account aggregators to fetch your own bank data in Python-friendly formats like JSON.
It's exciting to see open banking taking shape in India. I'm based in Europe and the fact that we have regulated and free open banking (under PSD2 law) is a game-changer for fintechs and developers. Instead of having to build/use hacky screen scraping solutions and ask end users to share their banking passwords, all major banks have real APIs that allow consent-based access to account data and to initiate payments.