As being one of the leading sectors of technological innovation, in banking and finance sector the conventional methods are being converted into modern and digital methods each passing day. As a result of this situation, the clients of the sector are able to access and manage their personal data through digital ways. In this manner, the opportunity of having more control over personal data lead to the rise of "Open Banking" system in financial World.
"Open Banking" can be defined as a network system enabling the bank clients to reach their personal data situated at all other financial institutions through third parties (i.e. FinTech firms). Through these networks, the clients can share their personal data safely with all other financial institutions that are on the network and so perform their operations in a faster and cheaper way. For instance, the companies can be informed about the firms that they are most frequently in touch with through the "Open Banking" system and bargain with the firms over this information.
In the light of this information, the current legal status of Open Banking in Turkey and in the World will be examined in the following paragraphs.
- Current Legal Status of Open Banking in the World
Open Banking has become more of an issue in the whole World with respect to the development of banking and finance sector. In this regard, the United Kingdom is placed on the top of countries that has achieved to become a global example of Open Banking. While monopolizing the global leadership of financial technologies, England and espeacially London, has become the attraction center for Fin-Tech companies.
Along with United Kingdom, Open Banking has become a rapidly growing agenda in countries such as Singapore, Australia, Hong Kong, China and Malaysia.
The primary legal regulations that are implemented worldwide are Payment Services Directive 1 ("PSD1") and Payment Services Directive 2 ("PSD2") of European Union. Through the entry into force of the PSD1 in 2009, the fundamental goal of the European Union was to create a rapid, standardized, safe and competitive payment market among the countries. With PSD1, a financial area has been formed where the same rules apply to all payment applications and a competitive atmosphere has been formed for the banks by creating the category of "Payment Services".
Later in 2015, PSD2 has been brought into force as a result of the practice of reviewing every law in European Union five years after the enforcement date. The innovations PSD2 brought with are; the inclusion of the payment operations outside of Europe, the creation of "Account Information Service Provider" and "Payment Initiation Service Provider" concepts and the creation of "Amplified Security and Identification" criterias for payment operations and financial account accesses.
- Current Legal Status of Open Banking in Turkey
The earliest development regarding Open Banking in Turkey has emerged in 2013 with the enforcement of Law on Payment and Securities Consensus Systems, Payment Services and Electronic Money Institutions numbered 64931 ("the Law"). With the entry into force of the Law, Electronic Money and Payment Institutions have legally come to the fore and the concept of "FinTech" has officialy emerged.
Later on in December 2017, Open Banking system has come to the
fore once again at the workshop performed within the arrangements
of the Eleventh Development Plan and has been added to agenda. In
March 2019, the Draft of the
Regulation on Banks' Information Systems and Electronic Banking Services ("the Draft") has been published by Banking Regulation and Supervision Agency and Open Banking services have been defined in the Draft. Later on, in the Eleventh Development Plan accepted on July 18, 2019, the issue of adaption to PSD2 has come to fore with the purpose of developing the infrastructure of Open Banking.
Finally, on November 12, 2019 Law on Amendment of the Law on Payment and Securities Consensus Systems, Payment Services and Electronic Money Institutions Along With Some Laws2 which had been offered to the Committee on Planning and Budget on October 16, 2019, has been accepted by the General Assembly of TGNA. Thus, Payment Initiation Service Provider (PSIP) and
Account Information Service Provider (AISP) concepts which are counted as Open Banking products and which will be supplied by payment service suppliers have been regulated under this law for the first time. Although big steps has been taken with regard to Open Banking, there is still no special legal regulation in Turkish legal system relating to this matter.
To sum up, as a consequence of the rapidly growing technological developments, consumers' need for reaching service and information in the fastest way has increased and accelerated the innovation in financial technology field alongside. As being one of the crucial actors of financial technology, Open Banking system has an important position based on the advantages provided to the sector customers as well as encouraging other finance actors to compete among each other. Although there is no special legislative regulation regarding to Open Banking in the current Turkish legal system, based on the global developments and Turkish government's interest on this matter, it is likely to see legal developments in the upcoming years.
1 Law on Payment and Securities Consensus Systems, Payment Services and Electronic Money Institutions numbered 6493 and dated June 20, 2013, published in the Official Gazette numbered 28690 and dated June 27, 2013.
2 Law on Amendment of the Law on Payment and Securities Consensus Systems, Payment Services and Electronic Money Institutions Along With Some Laws numbered 7192 and dated November 12, 2019 published in the Official Gazette numbered 30956 and dated November 22, 2019.
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