In a move to harness the potential of open banking, Coop Pank, one of Estonia’s leading banks, has partnered with Tietoevry Banking to roll out a new open banking system.
According to Finextra, this collaboration forms part of the bank’s broader strategy to secure a 10% market share in the Estonian banking sector by 2027.
Already ranked among the top five banks in Estonia, Coop Pank operates across a network of 320 stores under the Coop Eesti Keskühistu umbrella. The bank’s transition to open banking was primarily motivated by compliance needs with the EU’s Second Payment Services Directive (PSD2), which mandates banks to open up their payment services for greater transparency and competition.
To meet these requirements, Coop Pank implemented a suite of Open APIs over a six-month period, enabling secure data sharing with authorized third parties. This not only ensures compliance with PSD2 but also positions the bank competitively for future growth. “The agility of Coop Pank adapting new regulatory requirements is impressive and could serve as a benchmark for financial institutions in other regions,” noted Valdis Janovs, Head of Instant Retail Payments and Cards at Tietoevry Banking.
The technology provided by Tietoevry included a PSD2 compliance solution and a sandbox environment essential for testing interactions between the bank and third-party providers. This setup has allowed Coop Pank to integrate its payment systems seamlessly with various retailers and e-commerce platforms, increasing transaction volumes significantly.
With its Open API system fully operational, Coop Pank now processes all payments for the Coop Eesti Keskühistu through this new platform, enhancing its service offerings and enabling expansion beyond traditional banking channels. “This is just the start. This PSD2 compliance solution opens doors for further development and growth for the bank,” added Janovs.
The open banking initiative is expected to significantly boost Coop Pank’s customer base to about 150,000 and help it achieve a loan portfolio worth at least two billion euros by 2027. “This demonstrates the potential for growth that open banking can unlock. Coop Pank’s experience could serve as an inspiring example for banks worldwide as they strive to remain competitive in an increasingly open and interconnected financial ecosystem,” Janovs concluded.
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