Georgia Developed The Framework For Implementing The Standards Of Open Banking

  • 23 Dec, 2020
    | SforNews

The National Bank Of Georgia And The Banking Association Of Georgia Developed The Framework For Implementing The Standards Of Open Banking

The National Bank attaches great importance to the development of new financial technologies. Numerous projects have been successfully implemented, including the establishment of a Financial Innovation Office and a regulation laboratory. In the framework of the strategy for the development of new technologies and innovative approaches in the financial sector, the National Bank and the Banking Association of Georgia started working together in the first half of 2020 to create common standards for open banking. Having a common standard for the development of open banking is very important. The introduction of a common standard will greatly facilitate integration with stakeholders, which will help financial organizations and / or fintechs to offer customers a diverse product, reduce the cost of an existing product and / or increase consumer awareness.
Initially, the first version of open banking only allows bank customers to make personal information available on the preferred bank’s digital channels. The service is provided only for individuals and individual entrepreneurs. Customers of commercial banks will use this service from March 31, 2021. In the next stage, it will be possible to involve non-banking institutions and expand their functions – including the initiation of payments.

The National Bank and the Banking Association are publishing a framework work project to develop an open banking standard and increase transparency. Interested parties may submit their views and comments to the National Bank (innovationoffice@nbg.gov.ge) or the Banking Association (obstandards@association.ge). The Open Banking Standard Implementation Framework is available at the following link – https://bit.ly/obankge

About open banking

Open banking is a secure way to access financial information for all parties involved.
Traditionally, the development of financial services has only been the domain of highly regulated financial institutions (eg commercial banks) – they have opened accounts for users, possessed a wealth of information related to these accounts and developed various technological methods of accessing accounts, such as bank plastic cards, SMS and telephone services. , Internet Banking, Mobile Banking and more. Moreover, competition between financial institutions has gradually evolved into technological competition. At the same time, the rapid development of information technology and the increase in access to it have made it possible for other parties to develop financial technologies, although they do not have access to consumer finance and financial information. Consequently, the development of similar technologies was significantly hampered.

The Open Banking Initiative aims to create a legal framework that encourages the creation of high-tech financial services while at the same time ensuring the protection of consumers’ finances and financial information. With the open banking approach, financial services are provided to the customer not with one, but with the involvement of two parties:

• The first side, the so-called. The account service payment service provider opens accounts for users and services these accounts. It is still subject to strict regulation and ensures the protection of user finances and financial information
• The other side, the so-called. A third-party provider allows the customer to access their own accounts, which are opened with the account service payment service provider.

The Open Banking Initiative aims to impose relatively light regulations on third-party providers to make every effort to create new, flexible and more tailored financial services tailored to the interests of the customer. On the other hand, banks and other account service providers will be able to direct their efforts to the development of loans, deposits and other financial services, ie in the area where they have recognized competence.

• Open Banking in Georgia

Open banking is being developed in Georgia. Regulatory Approach – Commercial banks will be required to make certain information available to third-party providers due to ongoing and future changes to Georgian legislation. An Open Banking Committee has been set up with the participation of representatives of commercial banks – a working group that will lead the process of introducing open banking. In order to develop the Georgian national standard for open banking and to facilitate the practical implementation of this standard in the country, the Georgian Banking Association is conducting an open banking project. Georgia’s open banking standardization process is based on the Berlin Group standards (https://www.berlin-group.org/psd2-access-to-bank-accounts), taking into account the specifics of the Georgian financial sector and other factors.

Georgian Open Banking Standard

Current version of the Georgian Open Banking Standard (0.6) can be downloaded in PDF and Microsoft Word format Previous versions of the Open Banking Standard are not currently available Please send your comments and suggestions regarding the Open Banking Standard to the Georgian Banking Association by email at obstandards@association.ge

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