Open Banking involves the immediate exchange of information between financial institutions using electronic technologies, at the initiative of the customers.It is important that open banking can bring positive results to both consumers and the financial sector as a whole. Open Banking paves the way to the efficient use of new technologies, significantly improves access to finance, promotes sound competition, serving as the basis for the development of data-driven Fintech business models. Open Banking technology is already used in countries such as the United Kingdom, Australia and EU member states. The sharing of user data through such channels is mandatory for EU member states under the updated PSD2 regulation of payment services.
National Bank of Georgia initiated consultations with the banking sector on the introduction of Open Banking in Georgia, followed by regular working group meetings in the summer of 2019. The Open Banking Working Group brings together representatives of the National Bank of Georgia, the Bankers’ Association of Georgia and commercial banks. The Open Banking Committee set up with the Bankers’ Association is missioned to develop the standards necessary for the introduction of Open Banking in Georgia and to further promote of the project.
The Open Banking Committee developed the first version of the Open Banking Implementation Framework in September 2020 with the involvement of the Bankers’ Association of Georgia, commercial banks and the National Bank of Georgia. This framework document sets out the rules and standards for commercial banks to follow when initially sharing with each other their customer data, such as bank account balances and transaction information. The data should be exchanged online using Application Programming Interfaces (APIs) provided there is user consent and will.
Commercial banks have deadline until March 31, 2021 to implement the requirements of the first stage of Open Banking. After the first stage is successfully implemented, it is planned to gradually expand the use of Open Banking. That will apply to the amount of data to be shared at customer’s will, and increased ability to initiate banking transactions using open banking. The subsequent phases of Open Banking will consider the inclusion of other representatives of the financial sector and Fintech companies in the system together with commercial banks. This should facilitate the increased access to banking services for customers combined with greater diversity.