Planning on undertaking financial activities in Turkey? If you are, then you definitely need to know about open banking in Turkey and how it is used by Turkey-registered companies. Interested? Then let’s dive right into it.
How Open Banking Works
Basically, open banking’s a system which enables 3rd party financial institutions to:
- collect information from bank clients;
- utilize the said information to render services.
Currently, this communication takes place through API & can be accomplished in three different ways. When it comes to open banking, collected information:
- is publicly available;
- can be provided to interested parties;
- can be transferred within an organization.
As of now, a total of seven banks are providing open banking services through API portals in Turkey, with another ten providing their APIs via technology-driven organizations.
If you’re planning on opening a financial company in Asia, you should keep in mind that using open banking can help you establish lasting relations with multiple market participants. Open banking’s rapid development is causing governments of many countries to adopt relevant legislation, which greatly simplifies involvement in that kind of activities.
Turkey: Open Banking Regulation
Turkey has no provisions specifically governing open banking. Therefore, compliance with PSD in Turkey is achieved through adherence to the Law on E-Money Institutions, Payment Services & Securities.
It was the BRSA, the country’s main financial regulator, that provided the definition of open banking in Turkey in its 2020 guidance on regulation of e-banking systems & services. However, those who intend to establish a financial company in Turkey should keep in mind that not all PSD2 requirements are contained in Turkish legislation.
By ensuring greater financial inclusion, open banking has helped change the nature of relations between banking institutions & their clients. Open banking is expected to continue to grow in popularity within the next decade, leading to explosive growth of the entire financial services industry.
Therefore, all those intending to establish an open banking business in Europe should pay particular attention to regulation of financial activities in Europe, Asia & other jurisdictions.
If you need legal advice on regulation of open banking in the Republic of Turkey or elsewhere in the world you are highly recommended to contact IQ Decision UK. Our legal experts will be happy to provide with legal aid in opening a business in Turkey or starting any other financial activities in the country.