Open Finance builds upon the term Open Banking, which was created with the Payment Service Directive (PSD2) regulation voted by the EU in 2015. Open Banking is a financial technology term aimed at increasing transparency in financial services through the use of open APIs. This enables third-party developers to build applications and services around financial institutions and provides users of financial services with greater transparency, ranging from open to private data. The use of open-source technology makes it possible to achieve this goal. Thanks to Open Banking, new opportunities have opened up for financial services and innovation in the finance sector, which has also contributed to a more transparent market. Unlike Open Banking, which was aimed at individuals' financial data, Open Finance would focus on business data.

Open Finance can offer many benefits to business customers through APIs with financial data. A first step towards Open Finance would be to provide APIs that allow businesses and third-party actors to access and retrieve business data, including holdings, transactions, positions, and static data such as account information. One advantage of this is that customers gain control over their own data and can manage their financial transactions more efficiently. By allowing third-party actors to access this data, customers can easily compare offers and services, as well as their prices. Smaller business customers would also be able to benefit from advantages that are currently only available to larger actors.

A second step would then include providing APIs that allow businesses and third-party services to carry out transactions directly. This would mean that businesses and customers can make payments and transfers faster and more efficiently than before, increasing flexibility in how they manage their financial transactions. By providing these APIs, banks in collaboration with third-party actors can also enable a more integrated and seamless user experience for their customers.

Another advantage is that the opening of financial data creates more competition in the market, which can result in more competitive prices and better offers for customers. Banks will need to meet this increased competition by offering innovative products and services that are more tailored to customers' needs. This also increases opportunities for customers to distribute their assets between different financial institutions, which can increase market stability.

Security risks for customer data are an important issue, but similar security regulations to those in the PSD2 regulation and other measures can be applied to protect customer data from unauthorized users. This is particularly important because the opening of financial data can lead to increased transparency and better monitoring of financial institutions. Regulatory organizations such as the Finansinspektionen (FI) could then access the same APIs to gain better insight into banks and their customers. With a more transparent solution, money laundering and tax evasion can be identified more quickly and efficiently.

A potential disadvantage of Open Finance is that it may lead to higher costs for banks to implement APIs and other systems for managing third-party access. This can be a challenge for smaller banks and financial institutions. In addition, banks may try to lock down their customers by not offering loans if customers do not move all or a larger part of their holdings to the bank. However, this would lead customers to choose a competitor with better offers.

Open Finance will be more complex than Open Banking because it involves making more financial data and transactions available from different sources and of several different types. This requires a gradual implementation of new technical solutions and standards that all market players must follow in order to work together. An important factor in succeeding in this is to have structured regulation and clear guidelines for how Open Finance should be implemented and managed. This will help create a more uniform market and increase value for all actors. However, it is also important to set clear goals and deadlines to avoid possible delays and cost increases.

In summary, Open Finance can help improve financial services and promote innovation in the financial sector. By implementing adequate safeguards and regulations to address security issues, the benefits can outweigh the potential drawbacks. Open Finance can increase competition in the market, create more transparency and monitoring of financial institutions, enable a more efficient distribution of assets among different institutions, and give customers greater control over their own data. Open Finance can be a step forward towards a more open and competitive financial sector, with an increased opportunity to create customized solutions and a more efficient use of financial resources.

Ps. We're excited to announce the launch of our new data requirements page! This page is designed to provide our clients with clear and transparent guidance on what we need to integrate with their data providers. We're committed to doing our part to promote transparency and collaboration in the industry. By making our data requirements available to our clients, we hope to encourage others to do the same and to make it easier for everyone to work together more effectively. As advocates for OpenFinance, we believe in transparency and collaboration.