Open Banking Jargon 101

Share on facebook
Share
Share on twitter
Tweet
Share on email
Mail
Share on linkedin
Share

Open Banking Jargon 101

The financial services industry is a highly regulated space because of the risks that come with money management such as cyber security risks and identity thefthence the complexity of financial acronyms and terminologies due to its’ legislative nature. Furthermore, with the current drive for digital transformation, the acronyms now also involve tech-terms. As a result of that, an evident gap exists between the language that financial institutions speak versus that of an every-day user of banking servicesIn order to achieve higher rates of financial literacy, it is important that financial institutions understand that importance of simplifying the language used across the sector and bridge the communication gap.  

To simplify matters, we compiled a list of the most used Open Banking jargon for your reference:  

Account Aggregation: Allows customers to connect all their bank accounts onto one single unified platform.

AISPStands for Account Information Service ProviderIt is a type of regulatory license that grants businesses, with permission first, access to connect with a bank account and use that bank account information to offer a service.  

 Tarabut Gateway is a licensed AISP (Account Information Service Provider) by the Central Bank of Bahrain (CBB) and one of the services provided that falls under that license is account aggregation.   

 APIStands for Application Programming Interface. It is the link or ‘middle-man’ that communicates between two or more entities 

APIs allow data to be shared and communicated between different entities. The flow of data can be between banks themselves or between banks and other third-party providers. Hence, it empowers these entities to leverage on the data and develop personalized products and services to their end users.  

 BaaS: Stands for Banking-as-aSoftware. Simply, it is another reference for digital banking services.  

 Categorized DataIt is the process of grouping data into different categories. An example would be using a person’s financial data to access their spending behavior, financial position, and budgeting plans.  

 Consent Management System: built-in process that allows for the end-user to view, modify, and revoke access to their financial data at any given time

 FinTechIs an acronym for Financial Technology and refers to entities that use technology to offer financial services and products.  

 KYCIt stands for KnowYour-Customer and it is a common industry acronym which describes processes and pre-cautionary measures. Which are in place to identify and verify who the end user is, prior to account opening and account access.  

 Open APIAlso known as public API, is a publicly available interface that developers can access and use to build applications and services. 

 Open BankingIt is the sharing of financial datausing APIs, between financial institutions and third-party providers to offer customized or personalized end products and services.  

 PFMIt stands for Personal Finance Management and it refers to tools built in applications that help the end user with managing their personal finances such as saving, budgeting, investing. 

 PISPIt stands for Payment Initiation ServicProvider. It is a type of regulatory license that refers to a business or entity that can execute a payment transaction on behalf of the customer and at their consent 

 Tarabut Gateway is an example of licensed PISP (Payment Initiation Service Provider) by CBB that offers payment initiation services. 

 Regulatory SandboxA controlled regulatory environment for live testing of products and services, usually technology based  

 TPP: It stands for Third Party Providers. It refers to regulated and approved businesses that can connect to Open Banking APIs, hence connect to bank accounts and be able to offer products and services.  

Sign Up for Our Newsletter