Open Banking in Germany: Adoption, Connectivity & Market Outlook

In recent years, Germany has emerged as a leader of open banking adoption. But what spurred this rise in interest and what lies ahead for open banking adoption in Germany?

In our open banking league table in 2022, Germany scored second place as it proves to have had impressive momentum with open banking adoption. We’ve seen proactivity from German banks to drive innovation across user experience, vast coverage and alternative payments, as well as providing robust open banking regulatory frameworks.

Let’s explore the current state of open banking in Germany, Yapily’s connectivity across the country, and what the future looks like.

Open banking adoption in Germany

Germany saw an unsteady start to open banking adoption according to PSD2 regulation, but in recent years, partially spurred by the COVID pandemic and a strong transition to digital banking, has risen to be at the forefront of European open banking adoption.

The pessimistic open banking outlook and shaky API connectivity has evolved to embrace innovation and improved infrastructure. There has proven to be a recognition of the need for change by German banks and we’ve seen a steady rise of adoption since 2020.

Attraction to bustling cities like Berlin have attracted numerous fintechs and start-ups that welcome alternative payment methods, especially if it will increase security and lower costs. There are close to 950 fintechs currently active in Germany as of 2023, attracting a lot of investment and encouraging the widespread adoption of digital payments.

Germany also hosted The Berlin Group, which consists of almost 40 banks across the EU, and the NextGenPSD2 API, launched in 2020, which ensures stringent open banking practices that provide robust and standardised procedures for TPPs and German banks to integrate.

An issue with The Berlin Group that is currently preventing adoption is still not yet a standard with banks’ APIs, hence open banking infrastructures (like Yapily) can effectively aggregate different German banks’ APIs for a consistent output. Therefore, with clear regulations and efforts into improving the user experience and API standardisation, this will give peace of mind to any security concerns and provide an optimal payment journey with all banks and financial institutions.

Yapily’s Germany Open Banking Coverage

Our open banking platform went live in Germany 4 years ago and we now support 1,152 banks and financial institutions across the country, more than 90% coverage for AIS and PIS.

Explore the list of available institutions via Yapily’s open banking platform.

Future adoption of open banking in Germany

The open banking market is set to exceed $31bn this year with users expected to surpass 100 million. In fact, the Open Banking Global Market Report predicts that by 2028, open banking market valuation will reach $75.4bn, a CAGR of 25%. The UK has been a clear depiction of a widened number of use cases and industries that stand to benefit from frictionless open banking payments and data, such as lending and credit.

In February this year, the European Parliament passed new legislation to update SEPA rules to ensure that fund transfers for retail customers and businesses across the EU would be instant. This implored PSPs to implement greater fraud detection and prevention mechanisms and penalties for non-compliance.

Michiel Hoogeveen (ECR, NL) the lead MEP commented: “The Instant Payments Regulation marks the long-awaited modernisation of payments in the European single market. Customers can now say goodbye to the inconvenience of waiting two or three working days to access their money. We are delivering on something that people and businesses truly care about: transferring money within 10 seconds at any time of the day.

The implementation of these new rules is set to enhance the open banking framework by facilitating the quick and safe transfer of financial data and money. This development is likely to expand the range of services and solutions accessible to consumers, thereby integrating open banking more deeply into the financial practices of Europeans. Such an integration highlights a transition towards a more connected and flexible financial environment, with the swift processing of transactions emerging as a key feature of the digital economy.

But what about Germany specifically?

The future looks bright for further open banking adoption across Germany, especially as we anticipate the introduction of PSD3 which will strengthen consumer protection as well as improve user experience and competition.

The Financial Data Access framework (FIDA) should also help bolster adoption as it will allow access to non-payment accounts and represents a shift towards open finance. This looks to be a significant driver in the predicted rise of open banking users and be a big step towards offering a complete and holistic view of customer finances and investments.

Improvements could be made with standardisation of API quality and connectivity so all German banks and businesses can anticipate the same quality of open banking payments and data.

Finally, as with all financial services, education and collaboration is key to innovating in this space which will spark more businesses and users to adopt this method.

Our powerful API connecting across Germany

With our vast connectivity across German banks and financial institutions, get started with us today.

Speak to our open banking experts to explore our platform and discover how we can help your business connect to Germany.


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