Beyond PSD2: How to use open banking APIs for innovative European fintech products
Today, digital transformation in financial services redefines how consumers and businesses interact with their money. The shift is driven by a demand for greater convenience, personalization, and control, pushing traditional banking models toward innovation. A significant majority of consumers (76%) actively connect their financial accounts to digital tools for various financial tasks, demonstrating a strong appetite for integrated financial management, powered by bank APIs and modern fintech integrations. Similarly, the business-to-business (B2B) sector is embracing this change, with 85% of respondents already using open banking in their financial operations.
This widespread adoption underlines the growing recognition of open banking solutions and open banking platforms as a cornerstone of modern banking services, with a clear upward trend in usage over time. For example, the share of banking matters processed via gadgets in Germany rose from 28% in H1 2019 to 53% in Q1 2025, showing a steady evolution in the adoption of these tools.
At the heart of this transformation in the European Union lies the Payment Services Directive 2 (PSD2). Enacted as a pivotal piece of open banking regulation, PSD2 aimed to foster competition, drive innovation, and improve consumer protection across payment services. It mandated that financial institutions, including European banks, provide secure, standardized access to customer financial data and payment initiation capabilities to authorized third-party providers (TPPs) — but only with the explicit consent of the customer. This regulatory push effectively laid the groundwork for open banking as a concept, compelling the industry to adopt open banking APIs and open up previously closed banking systems.
While initially perceived by some financial institutions and fintech companies as primarily a compliance burden, PSD2 has since proven to be a powerful catalyst for growth, providing opportunities that extend far beyond PSD2's initial scope. The directive's mandate for open banking APIs has unlocked immense potential for innovative European fintech products. Businesses using these APIs report tangible benefits: 64% indicate improved profitability, and 63% see a positive impact on revenue. Despite significant progress, a quarter of businesses still haven't fully embraced open banking tools, with 20% expressing interest but yet to begin adoption, highlighting ample room for further open banking adoption.
In this article, we'll explore how, by moving beyond PSD2 compliance, companies can use these open banking APIs Europe offers to build truly transformative, value-driven European fintech products that address evolving customer needs and shape new business models within the dynamic financial services ecosystem.
PSD2 and open banking in Europe: Laying the foundation
The introduction of the Payment Services Directive 2 (PSD2) by the European Commission marked a turning point for banking across the European Union and European Economic Area. Designed to increase competition, improve transparency, and foster innovation, this regulation obliges financial institutions to open up access to financial data and payment services through secure, standardized open banking APIs. By breaking traditional data silos, PSD2 allows for a more competitive and customer-centric financial services landscape.
Open banking: Secure access and customer control
Open banking has transformed how financial data is shared and payments are initiated. Its core idea is to allow customers — both individuals and businesses — to give consent for open banking providers to access account information and provide payment initiation services directly from their bank accounts. Open banking initiatives are made possible through robust banking APIs, which prioritize security and banking data privacy at every step.
Key players in the open banking ecosystem
Under PSD2, two types of third-party providers (TPPs) play central roles:
Account information service providers (AISPs): These entities aggregate account information from multiple banks, helping customers get a full picture of their financial situation for better financial management and planning.
Payment Initiation Service Providers (PISPs): These providers let users initiate payments directly from their bank accounts, often resulting in faster and more cost-effective transfers compared to traditional card payments.
A European approach
Europe's open banking ecosystem is distinct, thanks to its regulatory framework and ongoing support from institutions such as the European Parliament and European Banking Authority. While global interest in open banking is on the rise, the European model stands out for its focus on secure, consent-driven access and a unified regulatory approach — creating both opportunities and challenges for fintech companies and financial institutions operating in this dynamic environment. A similar open banking services system to PSD2 exists in the UK, where it is implemented by the Open Banking Implementation Entity (OBIE); however, there is no equivalent centralized implementation body in other countries like the United States.
From “compliance” to “opportunities”: Unleashing innovation with open banking APIs
While many organizations initially viewed open banking as a regulatory requirement they needed to comply with, a growing number are now recognizing its immense potential for business growth and transformation. Open banking APIs empower both established financial institutions and fintech companies to create value-driven solutions, advance customer experiences, and develop new financial products and business models.
With open banking APIs, companies are moving beyond mere compliance to deliver:
Financial aggregation and personalized management
Open banking APIs help with the aggregation of account information from multiple bank accounts in real time, providing users a unified and comprehensive view of their financial data. This supports smarter budgeting, spending analysis, and financial planning through personalized insights. Developers use detailed transactional and income data with user consent to build apps that automate categorization, predictive analytics, and customized financial advice, improving financial wellbeing and user engagement.
Frictionless customer onboarding
Real-time access to verified financial data via open banking APIs speed up identity verification and income confirmation processes, reducing onboarding friction for new customers. This makes the process faster, more accurate, and secure, while lowering fraud risk, providing quicker access to payment and financial services.
Innovative payment solutions
Open banking allows users to initiate direct payments from bank accounts, bypassing traditional card networks. This reduces transaction costs and supports instant payments features, creating new fintech payment experiences and cost efficiencies for merchants and customers alike.
Alternative credit scoring and lending
Rich financial data accessed through open banking APIs allows lenders to perform more accurate risk assessments beyond traditional credit reports. By analyzing verified bank transaction and income patterns, lenders can offer better-targeted loans and credit conditions, promoting financial inclusion and supporting broader open finance goals.
Contextual financial services
Open banking APIs provide the delivery of personalized financial products embedded within customer journeys, such as tailored loan offers or payment plans precisely when needed during purchases. This context-aware financial support improves overall financial wellbeing by matching user needs and timely financial options.
Businesses adopting open banking are already seeing positive outcomes, not just in improved revenue and profitability, but in their ability to meet rising customer expectations for choice, control, and secure, personalized experiences. As the open banking ecosystem continues to evolve, there remain substantial opportunities for those willing to move beyond compliance and embrace the creative potential of open banking APIs.
Technical and regulatory landscape: Challenges and best practices
As open banking ecosystems mature, both technical and regulatory factors shape the road to successful implementation. While open banking APIs offer gateways to innovation, their robust integration into products and services requires careful attention to several key challenges. Understanding these factors is key for successful open banking implementation and providing robust API integration within the region.
Key technical challenges for open banking success
Organizations developing and integrating open banking solutions must address several significant technical hurdles to ensure seamless operation and widespread adoption:
- API standardization and interoperability: A major challenge is achieving seamless interoperability between the diverse banking APIs used by numerous financial institutions across Europe. Fragmented standards can significantly complicate fintech integration and hinder scalability for businesses aiming to operate across multiple jurisdictions.
- Scalability and reliability: As open banking adoption surges, solutions must be engineered to handle vast volumes of financial data and transactions with unwavering security and efficiency. Ensuring high performance and constant uptime is critical to user trust and system stability.
- Data security and consent management: Protecting sensitive financial information is paramount. Best practices demand robust authentication protocols, encrypted data transmissions, and clear, user-friendly processes for customer consent management, giving users full control over their open banking data.
Navigating the open banking regulatory landscape in Europe
The European regulatory environment plays a pivotal role in shaping open banking development. Staying abreast of these considerations is vital for compliance and fostering trust:
- Privacy and Consumer Trust (GDPR): European regulatory frameworks like GDPR heavily emphasize transparency, clear opt-out options, and user control over their financial data. Building and maintaining consumer trust is non-negotiable; businesses must demonstrate the highest standards of data privacy and security at every touchpoint, a key finding in reports on the rise of open banking.
- Evolving regulatory standards: Regulatory bodies, such as the European Banking Authority EBA — which plays a role at the EU level similar to that of the Financial Conduct Authority (FCA) in the UK — and national regulators, constantly update guidelines. This means open banking compliance is a moving target, demanding agility and continuous vigilance from institutions to adapt to new requirements, often stemming from directives like PSD2.
- Accessible dispute resolution: To reinforce transparency and a consumer-focused approach, robust mechanisms for customers to easily resolve inaccuracies or manage their data-sharing preferences are essential for a healthy open banking ecosystem.
Open banking best practices for sustainable growth and compliance
To overcome challenges and fully harness the potential of open banking in Europe, organizations should adopt these strategic best practices:
- Prioritize robust security measures: Implement end-to-end encryption, conduct regular security audits, and ensure crystal-clear consent management to safeguard user data and maintain institutional reputation. This is foundational for open banking security.
- Commit to interoperability standards: Actively engage with industry consortia and contribute to, or adopt, common open banking standards. This streamlines technical integration, reduces friction, and expands reach across the European market.
- Implement continuous regulatory monitoring: Allocate dedicated resources to track, interpret, and implement evolving open banking regulations across all relevant member states, providing ongoing PSD2 compliance and adherence to other applicable frameworks.
- Educate and empower users: Transparently communicate how financial data is used, provide intuitive controls for sharing preferences, and actively support customers in exercising their rights within the open banking ecosystem. This builds trust and fosters greater adoption.
By proactively addressing these technical and regulatory challenges and embracing these open banking best practices, organizations across Europe can unlock the full potential of this transformative era, driving innovation, enhancing customer experience, and securing their place in the future of finance.
Ronas IT: Your partner in European open banking innovation
At Ronas IT, we empower fintech visionaries to thrive within Europe's dynamic open banking landscape. By fusing technical excellence, regulatory expertise, and a user-first approach, we help startups and established businesses bring innovative, compliant financial products to market with speed and confidence.
Proven expertise in fintech development
Our portfolio showcases a track record of delivering robust fintech applications, from cutting-edge neobanks to secure analytics platforms. Each project reflects our commitment to security, regulatory alignment, and seamless user experiences — vital ingredients for long-term success in open banking.
Our core strengths
Deep regulatory understanding
Navigating complex frameworks like PSD2 and GDPR is second nature to our team. We continuously monitor European and global fintech regulations, ensuring every solution we build is compliant by design, fostering user trust and smooth market entry.
Complex API integration mastery
Open banking success relies on orchestrating multiple APIs, whether for account aggregation, real-time open banking payments, or identity verification. Our engineers specialize in unifying fragmented standards, delivering seamless connectivity with major banks, KYC providers, and payment systems.
Secure and scalable solution development
We architect fintech products using scalable microservices and cutting-edge security protocols. From encryption to access control, every layer is built to industry standards — including SOC 2, PCI DSS, and ISO/IEC 27001 — safeguarding sensitive financial data and supporting resilient, high-performance financial operations.
User-centric design for trust and adoption
A great user experience is at the core of adoption in open banking. Our product team blends modern UI/UX principles with transparent data usage and intuitive flows, making complex financial tools approachable and confidence-inspiring.
Fintech stories by Ronas IT
Our expertise is best illustrated through real-world solutions across diverse regions and regulatory environments:
Neobank app (US market)
We developed a digital banking solution tailored for helping users build credit and access banking essentials. This platform features intuitive onboarding, robust KYC/AML, instant transfers, comprehensive card management, and deep financial analytics — all powered by a secure, microservices architecture. Integrations with leading third-party services for KYC, payments, and account linking ensure regulatory alignment and strong data privacy, with full adherence to SOC 2, PCI DSS, and ISO/IEC 27001 standards.
Neobank app (Europe)
Serving freelancers and gig workers across Europe, this neobank app combines traditional and next-generation banking services adapted for fluctuating incomes. Our team oversaw end-to-end delivery, focusing on GDPR and PSD2 compliance, predictive cash flow analytics, and seamless KYC via Trulioo. Built with React Native and Laravel, the app is fully containerized for rapid deployment and scalable adoption, passing the stringent regulatory bar for European fintech products.
Forex analytics platform (UK)
For a UK fintech company, we engineered a GDPR-compliant platform for forex analytics and social trading. Key features included MetaTrader performance analytics, auto-backtesting, and multilingual user interfaces, combined with advanced data privacy protocols (ISO-27001 standard). The platform's design ensures accessibility for global users, including right-to-left language support.
Anti-fraud and 3DS2 payment processing (Australia)
We helped a global travel marketplace combat fraud with an innovative payment engine using adaptive 3D Secure 2, device fingerprinting, and optimized fallback payment options like PayTo/PayID. Our system drove a measurable reduction in fraud, improved checkout conversion rates, and streamlined backend fraud management — all while exceeding PCI compliance and Australian regulatory standards.
Across all projects, Ronas IT provides security, compliance, usability, and technology resilience that are never compromised. As your trusted fintech development partner, we turn regulatory complexity and technical challenges into competitive advantages — delivering financial products that are secure, scalable, and ready for tomorrow's open banking opportunities.
Ready to launch your next fintech solution or expand across European markets? Fill out a short form to unlock your competitive edge in open banking.
Related posts
Related Services
Development
React Native App Development Services
Development
MVP Development Services
Development