The Digital Account Check serves as the basis of many innovative banking and FinTech services. In most cases, this is done by Account Information Service Providers who, on behalf of customers, make their information from their online banking accounts available to other banks and third-party providers.
At FinTecSystems, we ourselves are an Account Information Service Provider. In discussions with customers and business partners, we are repeatedly asked what exactly Account Information Services are and how they work. We have summarised the eight most frequently asked questions and provided answers for you below.
1. What Are Account Information Service Providers?
Account Information Service Providers (AISP) are providers of Account Information Services (AID). They access information stored with account-keeping financial institutions on behalf of a customer. They analyse and consolidate customer and account data so that in turn they can be used for services from other banks and third-party providers. Popular services include multi-banking apps that use AISPs to aggregate various online banking accounts under one user interface, or online credit platforms that conduct a real-time credit check based on an aggregated expenditure account and liquidity assessment.
2. How Do Account Information Service Providers Differ from Payment Initiation Service Providers?
Account Information Service Providers (AISP) only collect customer and account data from the financial institution managing the account for analysis and aggregation purposes. On the other hand, Payment Initiation Service Providers (PISP) initiate transactions on the customer’s behalf to their online banking account. This is why they are also referred to as Payment Initiation Services (PIS), as they trigger payments or transfers at the account-holding bank on behalf of the customer.
3. To What Extent Do Account Information Service Providers Have Access to Bank accounts?
In principle, it is customers and account holders who issue an Account Information Service Provider (AISP) the order and authorisation to access their account information electronically directly from the account-holding financial institutions.
The European Commission requires that AISPs only have access to information for which a customer has issued the order and authorisation, and which is required within the scope of the service to be performed. For example, an online loan application only provides the lending institution with data that is relevant to the lending decision, whereas a traditional credit check requires applicants to submit account statements and salary slips that contain a lot of information that is not relevant to the lending decision.
As a result, Account Information Services customers are guaranteed sovereignty over their data with maximum security and maximum protection of privacy.
4. What Role Does XS2A Play for Account Information Service Providers?
Access to Account (XS2A) is the access to the customer’s online banking account. If a customer issues an Account Information Service Provider (AISP) the order and authorisation to access their online banking account, the AISP can, for example, extract sales and transaction data as the basis for a lending decision and make it available to the lending institution. From a purely technical point of view, the XS2A process is made possible by Banking APIs. Banking APIs are the interface to account-holding financial institutions through which AISPs gain access to the customer’s online banking account. At FinTecSystems, we have access to more than 100 million online banking accounts in Europe with our own Banking API and cover 99.5% of all banks.
5. What Are the Benefits of Account Information Services for End Customers?
With the help of Account Information Services, numerous banking transactions that were previously paper-based can now be digitalised. The Digital Account Check saves customers from the tedious sending and receiving of account statements, salary slips and other documents for credit checks in the context of granting a loan.
Once the customer has given their consent, the lending institution receives all the relevant information from an Account Information Service Provider (AISP) – cleanly analysed and aggregated. This gives customers sovereignty over their bank data and enables them to decide for themselves which providers to make it available to.
From online loan applications and multi-banking apps to contract optimisation – at first glance, many FinTech services look like banking services, but there are actually no banks behind their services. We have compiled eight examples that show that you don’t have to be a bank to offer high-quality banking solutions.
The Digital Account Check thus makes a decisive contribution to improving the customer experience. Online credit providers, comparison portals or online shops, which all have integrated the Digital Account Check into their service, can offer customers all the functions they need for their transaction without media disruption. Customers give the AISP permission to access their online account and save themselves the hassle of jumping back and forth between websites and tedious paperwork.
6. Which Business Models Benefit from Account Information Services?
The Digital Account Check is currently mainly used for granting loans. Providers who do not have a sufficiently long customer history to assess their credit rating benefit from Account Information Services. These include challenger banks such as N26, credit platforms such as smava, Finanzcheck and Check24 as well as factoring providers such as Finiata and Billie.
7. What Role Do Account Information Services Play in the FinTech Industry?
Account Information Services create the conditions for the joint use of account information and functions by banks and emerging FinTechs. New FinTech services such as multi-banking apps, account change services, online instant loans or factoring services for the self-employed are largely based on the Digital Account Check.
In this respect, Account Information Service Providers (AISP) play a crucial role in the positive development of the FinTech industry, as they provide an important component of the infrastructure required for new apps and services.
8. What Impact Does PSD2 Have on Account Information Services?
Since January 2018, the EU Payment Services Directive PSD2 has demanded that banks allow customers to decide for themselves which providers they want to make their account information available to – and banks must create the technical conditions for access in the form of banking APIs.
This has created a new dynamic of innovation in the financial world. New banking services improve the customer experience and strengthen competition – many services only become feasible with the solutions developed by Account Information Service Providers (AISP). In this respect, PSD2 provides a vibrant FinTech ecosystem of new apps and services powered by AISPs.