Open banking is transforming the way we do financial services, and Yapily is on a mission to provide the greatest coverage in Austria. So we’re pleased to announce that our API infrastructure is now available for local fintechs and businesses in Austria, providing seamless and secure access to financial data. This enables companies to expand their offering to Austrian customers, while leveraging the opportunities of open banking to create new and innovative products.
Although the Austrian fintech market is slightly smaller than some of the major European economies such as France and Germany, there are still many successful and innovative businesses that will look to enhance their products and services with Open Banking infrastructure. Cashpresso, BitPanda and Kompany are just some of the successful fintech companies working across the lending and blockchain verticals.
Coverage in Austria uses the Berlin Group/Next Gen PSD2 API standard. This means each institution is bespoke in terms of its implementation, and we also see some differences in the way authentication models are used by banks within this group. To date, all of Yapily’s integrations have been based on the redirect flow as that has been the main requirement of Open Banking standards in the UK. Now that we are expanding across Europe where other authentication models exist we are building those integrations to unlock coverage with banks that don’t offer redirects, but instead offer embedded strong customer authentication (SCA) methods.
An embedded SCA approach means that payment or account access is initiated on behalf of the user (PSU) by the third party provider (TPP). The user shares the credentials with the TPP who passes this to the financial institutions (ASPSP), such as banks for authentication. This process doesn't have a user facing interface like redirect or decoupled flows, but happens on the back-end between the TPP and the ASPSP. The method by which the authentication happens varies from bank to bank, but it is most frequently facilitated via Push Notification, Text Message or by using a Transaction Authentication Number.
Many banks across Austria and Germany leverage the embedded flow authentication methods, which has allowed us to broaden our coverage in both of these markets. You can find a demo of the embedded flow here.
As we move into Q2 we will be focussing on building out further coverage in the Nordic regions.