Open Banking in Serbia, promising to bring innovation to the financial industry
Serbia is preparing for an important stage in its financial evolution — introduction of open banking. National Bank of Serbia initiated the process to reform the local financial sector. The goal is to align it with the European Union's PSD2 directive. The implementation of open banking will definitely accelerate development of the fintech sector in the country, as it will enable faster and cheaper movement of money for all participants in the process. The e-commerce market in Serbia is substantial, and the influx of foreign visitors in recent years has led to a significant increase in the number of available services.
Open banking technology is a relatively recent development that has already transformed the payment industry. It has dramatically changed the approach to financial data management and the interactions between banks, customers, and third parties. Simply put, banks united in a single database and were able to maximize the speed of transactions and streamline many bureaucratic processes. As a result, an open code with an API has been created and is available for use by financial institutions. On the one hand, banks get an opportunity to improve their services, but on the other hand, they face a new level of competition. You can learn more about the history and outstanding examples of open banking in different countries in our previous article. Today, let's continue with the news.
Serbia, like many other countries, wants to keep up with European standards and for this purpose will have to modernize its financial systems. A crucial step in this evolution is the introduction of open banking. This development is being actively advanced in the European Union, largely due to the PSD2 standard that made it possible. This directive requires banks to be open and to create special conditions for the development of such services. The National Bank of Serbia has recognized the need to join the ranks of advanced countries. As a result, it has decided to reform the financial sector to align with EU requirements and standards.
What exactly is changing?
The plan is to start with innovations in the regulation of cross-border and local transactions. Residents of the country will be prohibited from funding foreign e-wallets or receiving fiat currency from unregistered electronic money institutions. Thus, licensing will be more precise and controlled. In terms of local operations, the exemptions relating to commercial agents, limited network services, and electronic communications, who may not need an EMI license, will be reviewed.
In addition, a notification requirement is being introduced for transactions exceeding €1 million in dinar equivalent. Surprisingly, such payments have not previously attracted much interest from the authorities. This change is aimed at increasing transparency and control over particularly large financial transactions. The electronic communications exemption will now apply specifically to electronic communications service providers and includes limits on the volume of transactions.
By implementing all the necessary changes, Serbia will be able to connect to an open API and participate in open banking technology. This is a big advantage for fintech companies, as they will be able to develop innovative solutions based on open banking, compete with traditional banking services, and do better. For online sales or iGaming, benefits are no less: offering a fast and convenient payment method on their websites will help increase conversion rates and improve user experience in one fell swoop.
Such changes are very important for the Gaming industry in particular, since this payment method allows instant payments and provides good service to platform users, without forcing them to give up their usual bank payment. No matter how you look at it, Europeans have own payment habits, and they have been accustomed to using bank transfers for many years. Many note that they are not ready to pay by card, because they feel insecure about the payment satefy, but a bank transfer is a different matter. We at Monoup provide assistance in connecting the open banking payment method for gaming projects and provide consultations on the implementation of this and other payment systems.
Wrapping up news from Serbia, but you can find even more news, cases, and articles in the Mono Talks section.
