One of the possibilities PSD2 (the second Payments Service Directive) offers, is Account Information Services (AIS), which enables businesses and individuals for instance, to have an immediate and integral overview of all bank accounts in one application. Subsequently, this provides a thorough insight into the financial position, financial obligations and (financial) possibilities. On top of that, the ability to analyze banking accounts in a matter of seconds increases the predictability of cash flows, which enables businesses and individuals to bear for a cash squeeze. Also, when applying for a (bridging) loan, having an integral overview of the liquidity position might come in very useful as banks or credit rating agencies are immediately able to assess the credit worthiness and financial health.
An example of a company that recently obtained a PSD2 license is Buddy Payment. It uses access to banking transactions to help private individuals and households in financial distress. This is a very interesting case, especially in this turbulent time, full of unknown (cash) challenges. Before we get to that point, we will explain briefly how Buddy Payment works.
Buddy Payment is an application that was originally developed to reduce the debt position of people and to avoid indebtedness in the future. Based on a thorough transaction analysis, the application creates an overview of fixed costs and disposable income per period. Thereby, it provides useful insights in the level of allowances people are entitled to, based on their income (e.g. childcare, rent and healthcare allowances). Hence, Buddy Payment is a means to help preventing people to end-up in debt and to get introduced to debt collection agencies or bailiffs.
As such, Buddy will help households to get more control over income and expenditure. It also helps them making the most optimal financial choices. Due to PSD2, this can be done faster than ever before. Yet, during these times apps like Buddy Payment can be of great value when deployed as cash management tooling.
Another example of an organization that knows the tricks of the trade is the FinTech Invers. The PSD2 license enables Invers to automatically retrieve banking transactions and to offer a real-time financial analysis tool. As such, Invers enriches transaction data with additional insights and delivers extensive financial analyses.
Invers collaborates, for example, with companies like PIN Voorschot (business credit provider) and RiskQuest (risk management advice). The three organizations allow SMEs to quickly apply for a (bridging) loan, for instance organizations in the hospitality industry that operate seasonally. Accordingly, this service can be useful to organizations that are in need of short-term liquidity.
Other companies that acquired a PSD2 license
The number of companies that acquired a PSD2 license is increasing. For example financial management apps like Peaks, Bizcuit and Yolt. These companies offer services in order to have real-time insights in multi-banking activities. Thereby, Peaks makes it possible to invest your change (in Dutch: 'wisselgeld'). Another example is Floryn. The license enables Floryn to quickly assess a financing application and creditworthiness of prospects, partly based on a transaction analysis of the applicant's bank accounts. Lastly, Tink. This start-up built an open banking platform to enable banks, FinTechs and other start-ups to develop smart and personalized financial services based on (financial) data. The Dutch bank ABN AMRO, has for instance developed the Grip app in partnership with Tink to give their customers a more complete mobile banking experience, using account aggregation to let users see all their different bank accounts in one screen.