Latest Konsentus Open Banking Tracker Highlights Growing Cross-Border Activity and Payments Focus

The Konsentus Q1 2024 TPP tracker reveals a growth in European third parties regulated to provide open banking services outside of their domestic market and an increase in TPPs authorised to initiate payments on an account holder’s behalf.

Key tracker findings (31st March 2024):

• There are 367 regulated third-party providers (TPPs) in the EEA
• Germany has the highest number of domestic third parties, standing at 37
• Italy has the highest number of non-domestic TPPs, totalling 149
• 52% of EEA TPPs passport their open banking services outside of their domestic market
• 66% of all EEA TPPs can authorise payments on an account holder’s behalf

For the first time since September 2019, when Konsentus started reporting on the number of regulated open banking third parties in the European Economic Area (EEA), over half now have the required permissions to provide open banking services outside of their Home-regulated market. Konsentus’ data reveals that in September 2019, 34% of the total number of EEA TPPs could passport their open banking services to other EEA markets however, in March 2024, this figure had reached 52% – an overall increase of 53%.

A similar trend is reported for payment services growth. In September 2019, the percentage of EEA TPPs who could initiate payments on an account holder’s behalf was 52%. The number has increased over the last few years and now stands at 66% (241 of the 367 total EEA TPPs).

The growth in cross-border transactions and increasing number of fintechs who are authorised to initiate open banking payments on an account holder’s behalf creates additional security risks for banks. These challenges are reinforced by data reported in an EBA Opinion Paper published on 29th April 2024 which states that for both cards and credit transfers “cross-border fraud rates in volume are about 9 times higher than for domestic transactions”.

Identifying and validating third parties to protect account data and funds is now becoming increasingly important and banks must prepare to safeguard their accounts in preparation for increased activity as the ecosystem expands to support the transition to open finance and beyond.

Mike Woods CEO Konsentus commented: “In the early years of PSD2, fintechs spent their time and effort building APIs and connecting to the banks. They are now capitalising on all that early hard work, monetising their services and earning revenue. Our data reinforces that although quarter-by-quarter change is marginal, the difference is significant when you compare the figures from 2019 with today. Banks must make sure they’re fully prepared to respond to the changing landscape and continue to keep their customers’ data and funds safe and secure.”

Konsentus’ award-winning technology solution, Konsentus Verify, empowers financial institutions to automatically validate the identity and regulatory permissions of any account access requests in real time and, by applying the relevant rules, whether regulatory, scheme or bi-lateral, enables an account access request to be correctly granted or denied each time it is received.