Danske Bank takes major step towards Open Banking in the UK

We have launched an IT infrastructure that will allow third party companies to develop new solutions for customers.

Taking a significant step towards Open Banking, we moved ahead on January 13th and launched a pivotal IT infrastructure in the UK.

The move allows authorized companies in the UK and elsewhere to use an open banking Application Programming Interface (‘API’) to access transaction information of customers and securely initiate payments on their behalf. This will pave the way for new innovative products and services for the benefit of customers.

"I am excited about the launch, which we have been preparing for quite a while. The APIs will make it possible for developers all over Europe to start creating new value-adding services."

- Søren Rode Andreasen, Chief Digital Officer at Danske Bank UK

New services coming up
Our launch is part of a broader initiative in the UK, after an inquiry by the Competition and Markets Authority (the ‘CMA’) determined that Open Banking could bring new competition and innovation to an industry that it felt needed shaking up. The UK is the first nation to launch Open Banking.

Accordingly, we launched the IT infrastructure at the weekend alongside Allied Irish Bank, Lloyds Banking Group and Nationwide. Five of the UK’s other major current account providers will follow as part of a managed roll-out which is expected to complete in March.

The IT infrastructure made available consists of two key APIs, which deal with account information and payment initiation. Basically, the APIs will allow third party providers such as FinTech companies to access customer account information and even initiate payments on behalf of customers. Both actions obviously depend on customer permission.

These initiatives are widely expected to bring about a number of new products and services such as account information aggregators allowing customers to gain an overview of their finances across different banks.

A frontrunner market
The launch by banks in the UK is being watched closely all over Europe as other markets prepare for the second European payment services directive, PSD2.

Contrary to the UK market, the rules in other European countries await upcoming regulatory technical standards (RTS) expected to come into effect no earlier than the second half of 2019.

“The UK is a frontrunner within Open Banking. Accordingly, the market development will give an indication of what we can expect in other European countries once PSD2 really comes into force. Additionally, Danske Bank will be able to gather valuable experience to use when competing in other European markets."

- Søren Rode Andreasen, Chief Digital Officer at Danske Bank UK

Sandbox in the making
In the Nordic countries, we launched our Open Banking initiative in June 2017. Since then, more than 500 interested parties have signed up for the platform. We are currently preparing a sandbox that will work as a test environment for developers who want to work with data made available by the bank. This is expected to be ready for testing in the first quarter of 2018.

“I am excited that FinTechs throughout the Nordics will be able to develop solutions for customers in the Nordics using our sandbox, while at the same time being able to try them out on actual customers in the UK. This is a unique value proposition,”

- Søren Rode Andreasen, Chief Digital Officer at Danske Bank UK

Danske Bank will launch APIs in the Nordic markets at a later stage.