The implementation of PSD2 European regulations and open banking laws pave the way for Serbia to achieve the prosperity it deserves in the 21st century. At the core of this transformation are the AISP and PISP financial systems, which drive the entire change.
What are AISP and PISP?
Account Information Service Providers (AISP) are third-party applications that customers authorize to access their bank account information—hence the term "open banking."
This simplifies money management for users by giving them a clear view of all their transactions and balances in one place. Typically, this is done through an AISP platform that provides spending analysis, budgeting tools, and personalized financial advice.
Payment Initiation Service Providers (PISP) are also third parties authorized by the customer. But instead of just viewing financial data, they can actually make payments directly from the customer’s bank account.
This means users no longer need to enter card details when shopping online. They just confirm their identity and approve the transaction, which is processed instantly. It's faster, easier, and more secure.
How do AISP and PISP work?
Both services rely on the open access mandated by the PSD2 regulation. Banks are required to grant third parties access to user data.
Of course, this can only happen with the user's consent. Here's how both services work:
AISP
- When a user chooses to use an AISP service, they first need to grant permission for their bank data to be accessed.
- Using an API (Application Programming Interface) provided by the bank, AISP platforms retrieve information about the user’s accounts and transactions.
- With this data, the AISP can offer spending insights, savings recommendations, personalized financial products, and overall support in managing finances.
PISP
- When a user chooses a PISP payment method, the platform initiates the transaction directly from their bank account.
- The user is then redirected to their bank’s page to confirm their identity and approve the payment—just a few simple steps.
- Once approved, the funds are transferred instantly to the merchant, with no need to enter card details.
Benefits for Clients
This is the basic framework of how AISP and PISP methods work, and the main benefits for users include:
- Instant transactions without the need to enter card numbers, PINs, create new - accounts, or similar steps
- A comprehensive view of all accounts the user authorizes, from various banks, all in one app, with the ability to manage them simultaneously
- Access to the best financial offers, optimized savings, insights into spending habits, and much more
- Maximum protection against malicious attacks, with full control over data access, which can be revoked at any time
Benefits for Banks
The mechanics of the PSD2 regulation are designed to elevate the entire financial ecosystem, benefiting all participants. For banks, this means:
- The ability to create new, personalized products and services for each customer
- Implementing the latest payment technologies and trends
- Opportunities to partner with fintech companies to develop innovative service packages through AISP and PISP solutions
- Lower costs while enhancing the overall customer experience
These systems create a network of participants—banks, fintech companies, and users—with users always at the forefront.
Fintech companies also benefit from gaining greater visibility and competitiveness in the market, all while operating under the support of banks.
Examples of AISP platforms from the European Union
Mint (Intuit)
Mint is one of the first personal finance management apps in the USA and Canada, founded in 2006.
It offers innovative control over all accounts in one place, along with tracking spending by categories. The platform also provides the most optimal solutions for saving.
Tink
What sets Tink apart from other platforms is its popularity among European banks, such as BNP Paribas, SEB, Ziraat Bank, Bank Norwegian, and many others.
This platform allows banks and fintech companies to integrate AISP services. It also offers users all the standard benefits, such as consolidating accounts, expense analysis, and personalized recommendations.
Examples of PISP platforms from the European Union
Klarna
Klarna is known for its "Buy Now, Pay Later" service, allowing users to make payments later.
This makes it one of the leading PISP platforms in Europe, known for its ease of use and fast payment process. It’s integrated with almost all major online stores in both the European and global digital markets.
True Layer
True Layer has built a reputation as one of the safest online payment services, with a strong focus on cybersecurity.
It’s one of the leading platforms in Europe, offering instant payments and refunds, as well as incredibly fast processing for all other transactions.
AISP and PISP in Serbia
As Serbia moves closer to implementing the PSD2 regulation, the financial sector is set for a major transformation.
PISP and AISP are at the heart of this shift, unlocking new opportunities for users, banks, and fintech companies.
Expected Solutions and Innovations
At this stage, several fintech companies are already working on solutions set to roll out when the PSD2 regulation takes effect in Serbia.
Some of the most promising examples include:
Personal Finance Management Apps & Bank Integration
- Fintech startups are developing apps that allow users to consolidate all their accounts in one place, providing in-depth analytics and personalized recommendations.
Advanced Analytics
- Through sophisticated analytical processes, users will gain a clear picture of their spending patterns, enabling them to make more informed financial decisions.
Payment Solutions
- With the adoption of AISP and PISP directives, new payment technologies will emerge, giving users more choices, such as:
- Direct Payments
- Make payments directly from bank accounts without entering card details, enhancing security, speed, and ease of use
- Alternative Payment Options
- Access secure and high-quality payment alternatives designed to ensure a seamless experience.
Partnerships with Banks
- Banks and fintech companies will have more opportunities than ever to collaborate, creating better and more practical financial solutions.
- Although many AISP and PISP services are still in development, some solutions are already available in Serbia.
Challenges and Opportunities
There’s great potential for developing AISP and PISP services in Serbia, but there are also challenges to overcome. Some of the key areas of focus include:
Regulatory Compliance
- Banks and fintech companies will need to fully comply with PSD2 regulations, which may involve initial investments in technology and staff training.
User Education
- Educating users will be key to ensuring they can take full advantage of the upcoming financial technologies and services.
The Future of Open Banking in Serbia Looks Promising
The future of open banking in Serbia looks promising. Numerous innovations and solutions are already on the horizon. As the PSD2 regulation is implemented, users will benefit from faster, safer, and more efficient financial services.
Collaboration between banks and fintech companies will be key to the success of this transformation, ensuring that all market participants have equal opportunities to be visible and competitive.
Author: Nevena Milić
