Open Banking Glossary for Finance Teams - The A-Z of Open Banking
The world of finance is full of specific terms and abbreviations used to cover the many processes and regulations that you need to know.
Open Banking is an area that is full of complicated terminology of its own, which can be daunting to anyone new to the concept of Open Banking and how it all works.
We’ve put together a complete Open Banking glossary to help you understand all the various terms. Before you get lost in all the financial jargon, make a quick reference to this A - Z Open Banking glossary below.
Open Banking Glossary - 27 Terms You Need to Know
Account Information Service Provider (AISP)
An AISP is a business that has access to bank account information. Unlike PISPs (explained below), ASIPs cannot initiate payments.
Account Servicing Payment Service Provider (ASPSP)
An ASPSP are entities in the Open Banking ecosystem that publish application programming interfaces (APIs). APIs allow third-party providers to make contented payments and make the account transaction data of their customers available to third-party providers through API endpoints.
ASPSPs also provide and maintain payment accounts for payers, under the payment services regulations (PSR) definition.
Account to Account (A2A)
A2A payments are when one bank makes another payment directly, without using a card. This could include payment forms like credit transfers, direct debits, and immediate payments.
This refers to any data that is made available to an API user. It could also refer to data made available to a TPP through APIs.
An API provider is any service that uses an open data API. API providers offer this open data through an API gateway.
This is any person or organisation that develops apps that use data from an API provider.
Card-Based Payment Instrument Issuer (CBPII)
A CBPII is a type of payment service that issues card-based payment instruments that cardholders can use to issue transactions from payment accounts held with a different payment services provider.
The CMA order refers to the Retail Banking Market Investigation Order 2017.
Open Banking issues certain data standards every now and then. These data standards are in compliance with the CMA order.
Dynamic Client Registration (DCR)
DCR is a process that lets trusted third parties register themselves with an ASPSP.
European Banking Authority (EBA)
This is an independent European authority whose aim is to make sure that regulation and supervision across the European banking sector remain consistent and effective.
European Banking Authority Regulatory Technical Standards (EBA RTS)
Regulatory technical standards are developed by the EBA and submitted to the European Commission for endorsement. These standards outline a clear set of criteria necessary for compliance. This covers things like data security and legal accountability.
Financial Conduct Authority (FCA)
The FCA is a conduct regulator in the UK The FCA regulates 56,000 financial services firms and financial markets, and is the prudential regulator of over 18,000 of these firms.
General Data Protection Regulation (GDPR)
A regulation intended to strengthen data protection within the EU. The GDPR is a regulation issued by the European Parliament, the European Council, and the European Commission.
Host Card Emulation (HCE)
This Open Banking glossary term refers to credentials that are stored in the cloud instead of on mobile devices.
Any entity that is required by the CMA Order to enrol in Open Banking is a mandatory ASPSP.
An Open API, also known as a public API, is a freely available application programming interface (API) that lets developers programmatic access to a proprietary software application.
Open Banking Ecosystem
The Open Banking ecosystem includes all of the various elements that allow for Open Banking to take place. The Open Banking ecosystem includes things like governance, API standards, security, systems, and anything else that facilitates Open Banking operation.
Open Banking Implementation Entity (OBIE)
This is the delivery organisation that develops and defines the different APIs and standards that Open Banking revolves around. OBIE works with CMA9 and various stakeholders to achieve this.
Open Banking Services
These are the services provided by Open Banking to Open Banking participants. Open Banking services include things like the provision and maintenance of the Standards and Directory.
Open data is information that anyone can access, use, and share. This includes product information on banking products, ATM and bank branch information, and SME unsecured lending.
Payment Initiation Services Provider (PISP)
This is one of the more complex Open Banking glossary terms. A PISP is a business that sells services online and can get requested by users to initiate an order for payment. A PISP is generally an intermediary between a financial institution and a service provider.
Payment Services Provider (PSP)
A PSP carries out regulated payment services. This includes AISPs, ASPSPs, PISPs, and CBPIIs.
Payment Services Regulations (PSR)
Payment Services Regulations 2017 is the UK's implementation of PSD2. This includes all regulatory technical standards as developed by the EBA.
Read/Write APIs let third-party request account information and initiate payments from these accounts. Of course, this needs to be done with the end customer's consent.
Third-Party Provider (TPP)
TPPs are organisations or people that use APIs developed to standards to access customers' accounts, provide account information services, or initiate payments. TPPs are either PISPs and/or AISPs.
Variable Recurring Payments (VRPs)
VRPs let customers connect authorised payment providers to their bank accounts to make payments on behalf of the customer. VRPs offer a good level of control and transparency to these payment systems.
Open Banking can be a confusing concept given the sheer number of terms and abbreviations included, especially considering that it flows into the broader scope of finance.
The best way to understand Open Banking and all the terminology involved is to use the comprehensive glossary listed above. This guide will help you go from zero to pro.