Opening of the banking system
The service is based on a software solution from Meniga that creates access to bank accounts in all domestic banks, Arion Bank, Íslandsbanki and Kvika Bank, through APIs. Once the savings banks are ready, they too will be accessible in this manner. The service is grounded on new legislation on payment service (PSD2) that entered into law in Iceland two years ago. This legislation provides that banks and savings banks must give access to the payment accounts of their customers to licensed service providers.
Surveys show that customers are very satisfied with Landsbankinn’s app. The app is easy to use and includes more features than other banking apps. Landsbankinn has emphasised a user-friendly design that allows customers and their families to achieve a joint overview of their finances. Our customers can use the app to authorise others to view or transfer from their bank accounts as well as establish joint savings for common goals. The new feature, viewing bank accounts with other banks and transferring from them, is a continuation of this theme. Now customers of other banks can use Landsbankinn’s app, without actually being Landsbankinn customers, and families can enjoy a shared view of their finances regardless of where individual members choose to bank. The ideology of open banking is grounded on providing choices.
Yet this new feature is only a fraction of what PSD2 and the open banking system will affect. Implementation of the PSD2 legislation has been a gargantuan task for Landsbankinn as for other banks and involves extensive changes to the technological infrastructure of the banking system. Alongside implementation of PSD2, Landsbankinn renewed and modernised older systems to align with European standards. Today, our systems are more responsive, more efficient and safer.
By offering this service, we at Landsbankinn are taking the first step. We firmly expect fintechs to develop solutions for both individuals and companies, perhaps targeting the retail market and allowing people to pay for goods and services directly from their payment accounts instead of using payment cards. Domestic, independent payment solutions have been the subject of public debate in the past 1-2 years and this new service marks a milestone on that journey.
To make it easier for fintechs and other financial institutions to work with Landsbankinn in the spirit of the open banking system through APIs, the Bank has opened an API marketplace. Landsbankinn’s marketplace uses the services of Canadian fintech Salt Edge. Our collaboration with Salt Edge allows us to respond to everyone who wants to connect with Landsbankinn around the clock, 365 days of the year. This means that Landsbankinn is providing first-rate service to fintechs and financial institutions who choose to develop proprietary payment solutions or other features in collaboration with the Bank.
Landsbankinn applauds the competition the new PDS2 legislation encourages and intends to participate with enthusiasm and continue to develop new, first-rate solutions and services for its customers.
Over the next few years, the Bank is set to launch various new features in the app that will provide Icelandic families with an even better overview of their collective finances and allow them to plan for the near and long term. We are also working to simplify the Bank’s key processes so that customers can take care of all their bank business, both the mundane and the more complicated, in the app. As before, we also operate the largest branch network in Iceland and a highly effective Customer Service Centre.
