Open banking in Europe: The impact of the Revised Payments Services Directive on Solarisbank and Insha

Nanaeva, Zhamal and Aysan, Ahmet Faruk and Shirazi, Nasim Shah (2021): Open banking in Europe: The impact of the Revised Payments Services Directive on Solarisbank and Insha. Forthcoming in: Journal of Payments Strategy & Systems

Abstract

Rapid developments and the adoption of financial technologies (Fintech) lead to radical changes in the delivery of financial services, including enabling fast payment systems. The recent Covid-19 pandemic catalyzed these processes, while Open Banking supports their further advancement. The concept of Open Banking is gaining global recognition for integrating innovative financial service providers into the sustainable financial ecosystem. This paper discusses Open Banking, including its core building blocks, prospects, and challenges. Given the European Union's pioneering role in adopting Open Banking regulations, the paper also reviews the revised Payment Services Directive (PSD2) and its role in advancing the European fast payment systems. Furthermore, the paper analyzes the practical implications of the PSD2 in Germany by reviewing the examples of the banking-as-a-service platform and the Islamic digital bank, Solarisbank and Insha, respectively. Finally, the paper sheds light on the benefits of Open Banking for ecosystem stakeholders, including fast payment system providers, and what they can derive from the introduction of Open Banking regulations.

• Item Type: MPRA Paper
• Language: English
• Keywords: Open Banking, PSD2, Fintechs, Payment Services, Insha, Solarisbank
• Subjects: E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E49 - Other; G - Financial Economics > G1 - General Financial Markets > G19 - Other; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O35 - Social Innovation; P - Economic Systems > P1 - Capitalist Systems > P16 - Political Economy; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q0 - General > Q01 - Sustainable Development

References

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Futher readings The authors have deemed useful findings and recommendaions of the following papers that may be essential to understanding the topic of payment systems and regualtons: Akin, G. G., Aysan, A. F., Gollu, G., & Yildiran, L. (2012). Interaction between payment services and credit services in credit card MARKETS. Regulation and Competition in the Turkish Banking and Financial Markets, 163. Akin, G. G., Aysan, A. F., Ozcelik, S., & Yildiran, L. (2012). Credit card satisfaction and financial literacy: Evidence from an emerging market economy. Emerging markets finance and Trade, 48(sup5), 103-115. Aysan, A. F., & Al, H. (2006). Assessing the preconditions in establishing an independent regulatory and supervisory agency in globalized financial markets: The case of Turkey. Bogazici University ISS/EC Working Paper, (06-06). Aysan, A. F., Bergigui, F., & Disli, M. (2021). Using Blockchain-Enabled Solutions as SDG Accelerators in the International Development Space. Sustainability, 13(7), 4025. Tekin, H., Polat, A. Y., Aysan, A. F., & Muğaloğlu, E. (2021). Cash Management, Governance, and the Global Financial Crisis: Evidence From Developing Asia. Asian Economics Letters, 2(4), 27135.