The state of Open Banking in Central and Eastern Europe – Finqware interview

Tuesday 16 February 2021 09:25 CET | Editor: Vlad Macovei | Interview

Cosmin Cosma, Finqware’s CEO, shares insights on Open Banking’s presence in CEE, its struggles, benefits, and use cases, along with how banks react to this new environment

What can you tell us about Finqware’s story and how would you describe the company’s business model and services? What role does the company play in the Open Banking ecosystem in Romania?

On short, Finqware is an infrastructure and innovation provider for banks, fintechs, and businesses to consume data and collect value from Open Banking.

We started back in 2018 with an idea to use PSD2 as an opportunity to simplify the financial life of people through a PFM app. After realising that the current Open Banking APIs status in Europe is generating a lot of trouble in building the data aggregation feature of any PFM service, we concluded that a well-built aggregator might bring much more value to the market during this current stage of Open Banking in Europe. Players like Plaid, Tink, or TrueLayer were already providing examples of sustainable business models around financial aggregation platforms, so we decided to pivot towards an infrastructure business and quit the front-end proposition. We also chose to target B2B markets rather than consumers, as these segments can come with a lot more traction and speed of adoption in a new service category such as Open Banking. One of our main target segments is banks that want to consume data from other banks’ APIs to provide an improved experience to their customers. Another target segment which we believe will have a rapid adoption of Open Banking services is the corporate segment, namely large regional companies that need a simpler and more effective solution for bank connectivity for their ERPs or cash management processes.

Our role is to build a middleware for financial API aggregation to interconnect businesses and fintechs with financial service providers. Our Finq OneAPI infrastructure is a financial data hub that creates a platform for innovation, solving the complexities of Open Banking.

What is the state of affairs of Open Banking in Romania (or CEE region) and what initiatives do you expect in this space? What are the main challenges faced by Romania regarding Open Banking?

Currently, Romania, like most other countries in the CEE, is facing a growing but still low level of Open Banking services adoption, as compared to more advanced countries. In the UK, for instance, they claim to have reached 2 million users already circulating their data through Open Banking APIs. In our region, we are still struggling between a lack of very relevant use cases and the banks’ APIs capacity to provide a frictionless experience and access to consistent data.

To foster better adoption and more appealing use cases, we expect the regulatory bodies to be more involved in supervising and supporting the ecosystem. EBA has released a set of technical standards imposing a certain level of security but also provided a set of recommendations regarding the avoidance of unnecessary user frictions that may occur when implementing the security constraints. We are constantly raising these aspects in our relationship with the banks and they are quite receptive in taking our feedback and improving their APIs. The same approach should be taken by the National Banks in the relationship with the commercial banks. They should also encourage new fintech players entering the Open Banking area by granting more PSD2 licences.

Can you please name some relevant/promising use cases of Open Banking in the CEE region and what more do you expect in this regard? Did the pandemic accelerate the process of digitisation and Open Banking implementation?

We see 3 main areas of Open Banking value propositions:

  • Financial Convenience - means making financial decisions and management to be more accurate, based on data availability and visualisation. On the consumer side, banks like ING Bank Slaski in Poland made multibanking available to their customers in their mobile application. A similar implementation can be seen on the Neo digital banking app of Banca Transilvania in Romania, powered by our Finqware aggregator.
  • Better Risk Management - financial data availability in aggregated and normalised format opens the door to a suite of solutions to be used in creditworthiness decisions. Verticals like banking, insurance, telecom are the first potential customers to step in for leveraging the data secretly kept in the old times by banks. Banks themselves are the first to get value by using structured data from other banks in their risk decisions for their customers. We already started to implement projects to showcase our capabilities for this value road with OTP Bank Croatia, in a POC project for income recognition, during the 2020 Spring pandemic lockdown.
  • Data-Driven Optimisation - Programmatic access, enrichment, and manipulation of data, together with payment initiation capabilities are to be the paramount fundamentals for many automation processes. For companies, integrating the capabilities of account information and payment initiation can provide an automated flow for intra-group cash balancing and optimisation.

How do banks in the CEE region react to Open Banking, especially in terms of data sharing? Do fintechs encounter reluctancy from banks regarding partnerships?

In the current financial ecosystem, banks carry the flags of trust and customers usually follow them, as it’s safer than taking the opposite direction. Largest banks already understand they need to comply with the PSD2 regulation and they are now starting to understand that people who trust them expect to start benefiting from this regulation. So, banks started promoting Open Banking themselves. They overcame the reluctancy phase and they are now actively looking for the most competitive and creative innovation partners to embed Open Banking into their customer experience or products. We took part in several startup contests or accelerators sponsored by banks in the region, such as the Citi CEE PSD2 Challenge, Fintech Lab by MKB, InnovX by BCR, or FinQuest by Alpha Bank Greece and we will continue to do so.

In January 2021, Finqware announced a EUR 500K investment led by Elevator Ventures. What are your developing plans regarding this seed money and how does it influence the company’s mission and growth strategies?

The investment will support our growth plans in the region as well as our product development roadmap. We see a growing demand for Open Banking data consumption in all the CEE countries, therefore we are focused on enriching our data aggregation and data processing capabilities to be able to quickly scale up to a larger number of customers, in the banking or fintech field.

Our experience with Croatia and Romania allows us to be confident that our connectivity coverage will be fully extended across the entire CEE region by the end of 2021. However, only after going in production with one or two customers by country we’ll be able to declare that our coverage is ‘Open Banking at work’ indeed, as our experience has shown us that you can scale only after you fully test your connectors with end-users.

We don’t consider the number of connections as a key indicator in the market, we see players bragging about connecting a market but with no user adoption in it and when we connect the production APIs we do debugging and testing as if nobody connected before to that bank.

Even if the investment comes from the corporate venture capital firm of Raiffeisen Bank International, we are committed to our vision of being a true Open Banking player and an innovation partner for any bank in the region.

About Cosmin Cosma

Cosmin Cosma is the co-founder and CEO of Finqware.  Ex-banker, having previous corporate experience with banks like GE Capital, Volksbank, Garanti Bank, and ING Bank, where he held different managerial positions, Cosmin also is the President of the Romanian Fintech Association (

About Finqware

Finqware is a Romanian fintech company operating in Central and Eastern Europe. The company was founded in 2018 with the aim of developing disruptive technology and solutions to put Open Banking at work, one of the most important shifts in the financial industry on its path to data driven economy models. Finqware is already famous for starting up the Open Banking movement in countries like Croatia and Romania, and it is internationally recognised for its technology with numerous awards, including a Seal of Excellence from the European Commission.

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Keywords: Finqware, Open Banking, Europe, Romania, Central Eastern Europe, banks, API
Categories: Banking & Fintech
Countries: Europe
This article is part of category

Banking & Fintech