Thu, Nov 07 2024
One of Estonia's top banks, Coop Pank, has teamed up with Tietoevry Banking to introduce a new open banking system in an effort to fully use the potential of open banking.
Finextra claims that this partnership is a component of the bank's larger plan to gain 10% of the Estonian banking industry by 2027.
Operating through a network of 320 stores under the Coop Eesti Keskühistu umbrella, Coop Pank is already one of Estonia's top five banks. The EU's Second Payment Services Directive (PSD2), which requires banks to open up their payment services for more transparency and competition, served as the main driving force behind the bank's move to open banking.
Over the course of six months, Coop Pank deployed a suite of Open APIs to satisfy these standards, allowing for safe data sharing with approved third parties. In addition to guaranteeing PSD2 compliance, this puts the bank in a competitive position for future expansion. Valdis Janovs, Head of Instant Retail Payments and Cards at Tietoevry Banking, said, "Coop Pank's agility in adapting new regulatory requirements is impressive and could serve as a benchmark for financial institutions in other regions."
A PSD2 compliance solution and a sandbox environment—both crucial for testing interactions between the bank and outside providers—were included in the technology Tietoevry supplied. Transaction volumes have increased dramatically as a result of Coop Pank's ability to effortlessly connect its payment systems with a variety of shops and e-commerce platforms.
Now that its Open API system is fully functional, Coop Pank uses this new platform to handle all payments for the Coop Eesti Keskühistu, expanding its service offerings and opening up new avenues for growth outside of traditional banking channels. "This is only the beginning. The bank has more opportunities for development and expansion thanks to this PSD2 compliance solution," Janovs continued.
It is anticipated that the open banking strategy would enable Coop Pank reach a loan portfolio of at least two billion euros by 2027 and greatly increase its client base to about 150,000. This illustrates the growth potential that open banking may bring about. As banks across the world work to maintain their competitiveness in a financial environment that is becoming more open and linked, Coop Pank's story may provide an encouraging model, Janovs said.
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