On August 1, a new law came into force in Ukraine, introducing the concept of open banking. This means that banks and non-bank institutions, where Ukrainians have accounts, will be required to provide information about those accounts to third parties at the client’s request, reports Baltimore Chronicle, citing Ekonomichna Pravda.
This move could have a significant impact on the development of Ukraine’s financial sector, as open banking will serve as the foundation for creating new fintech startups that will work with clients’ banking data and offer new products. It could change the structure of the market, as banks with progressive mobile applications will be able to attract more clients by enticing them away from other institutions.
The concept of open banking implies that clients themselves decide whether to share their banking data with third parties. Data exchange will take place via specialized interfaces (APIs), which allow different programs to exchange information. This will enable users to consolidate all their bank accounts in one app or through third-party services that provide such offerings.
Ensuring the security of such operations is a crucial aspect. All data will be transmitted through secure communication channels, and the exchange process will occur with the user’s consent, using enhanced authentication—such as Face ID or SMS confirmation. Additionally, companies that access financial data will need to go through authorization with the National Bank of Ukraine and be included in a special registry to ensure users’ security.
The introduction of open banking will not only benefit individuals but also corporate clients, who will be able to integrate their accounts’ data into a single application, significantly simplifying reporting and management within companies. For banks, this process can become a stimulus for increasing competition. In particular, to take advantage of modern internet banking, clients will no longer need to be customers of a particular bank. It will suffice to provide account information from another bank.
Regarding the cost of open banking services, the National Bank of Ukraine assures that clients will not have to pay extra for granting access to their banking data to third parties. Basic APIs used for data exchange cannot be charged by banks, while commercial APIs may be subject to agreements between banks and third parties.
Although open banking officially began on August 1, the first products utilizing these technologies will not appear for several months. According to legal requirements, banks have five months to adapt, and startups can only begin operations after passing the National Bank’s authorization procedure.
Earlier we wrote that Ukraine prepares salary increase for military personnel to NATO standards.