Spanish banking giant BBVA has announced the launch of a Banking-as-a-Service (BaaS) platform in the US, dubbed BBVA Open Platform, per a press release. Open Platform allows third parties to access a suite of banking services from BBVA, through application programming interfaces (APIs), enabling them to offer their customers financial products without needing to provide a full suite of banking services.
Once third parties pass compliance and security checks, they can plug directly into BBVA’s core digital banking platform to access services like identity verification, account origination, and card issuance.
Open Platform is part of BBVA’s broader effort to maximize open APIs for financial services.The bank has made strategic acquisitions to develop internal ventures that utilize open APIs and digital platforms. As a result, it was able to launch its BBVA API Market in Spain, making 11 banking APIs available, in 2017.
This helped the bank move ahead of the introduction of the EU’s PSD2 directive this year — which mandated banks operating in the region give third parties access to customer account data at their request. It has also rolled out numerous APIs in Mexico, with more set to be released in 2018.
According to BBVA, Open Platform saw high demand during its beta period, and is already being used by its neobank Simple, as well as PFM app digit.co. As such, it seems likely the platform will find even stronger demand following its full launch.
The US is behind the curve on open banking, but BBVA’s move suggests it may be embraced in the future. The UK has launched its own Open Banking regulation, while Australia is in the process of writing similar laws set for introduction in 2019.
In contrast, the US has not made any meaningful progress in terms of legislative support for open banking, though the Treasury Department has published a report that includes guidance on open banking for sharing customer account data. Banks in the country have also previously contended that regulatory and security worries have deterred them from opening up their networks.
However, BBVA’s efforts indicate that open banking is likely to be embraced in the US, despite a lack of regulatory demand for it. As incumbents continue to explore options to stave off fintechs, other banks could be led to adopt a similar approach to BBVA. For BBVA, Open Platform can help it gain relevance among a wider client base, while helping to diversify its revenue streams.
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