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Banking aggregation: what is it for?

IT development has simplified a myriad of operations that improve commerce and customer information management. Within the banking and business environment, bank aggregation represents a significant improvement in operational performance.

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What is banking aggregation?

In general terms, banking aggregation refers to the various systems of automatic collection of account and customer information found in the banking sector. This information can then be made available to other institutions under certain conditions of use in order to provide a better service.

It is an information management method that is part of the so-called open banking trend, which promotes transparency and access to information. The technologies developed for this purpose comply with certain regulatory parameters and fall within the European regulations of the Revised Payment Services Directive or PSD2.

How banking aggregation works

The way banking aggregation systems work is quite simple: customer information on accounts, transactions, payments and finances, among other things, are associated with a single owner who has all his information in a single interface.

In addition, this type of system allows the service owner to issue access licenses so that third parties can use the information to improve their services and business performance. This is achieved thanks to Application Programming Interfaces (APIs): software products needed to manage bank accounts and operations.

PSD2 and banking aggregation

The so-called Account Information Service (AIS) offers the possibility to lend the information to third parties at your discretion. The owners of the information must give their explicit consent and can withdraw it at any time.

As this generally involves bulk data from a multitude of accounts from which the liquidity, purchasing habits or degree of indebtedness of a certain demographic group can be ascertained, the information is catalogued using the protocols established by the European Union’s revised Payment Services Directive (PSD2).

Banking aggregation softwares

There are many banking aggregation softwares that employ different verification, cataloging and geolocation protocols for data collection. These collect data from banks, accounts, credit cards, personal data and financial services, among many others, within the same organized platform.

There are two types of protocols used to establish banking aggregation: PIS payment aggregators and AIS information aggregators.

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Payment aggregators (PIS)

Payment Initiation Services (PIS) are protocols for collecting data from payment transactions that customers perform on a regular basis.

They are present in most payment and transfer services, improving the operational performance of the platforms in terms of billing, receipt and payment methods.

Information aggregators (AIS)

On the other hand, AIS -Account Information Services- collect a wider range of information that allows banking information to be optimized according to other demographic variables.

Both technologies make it possible to study the risk associated with financial services and gain a better understanding of how customers spend their money.

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How banking aggregation benefits the customer

The benefits of bank aggregation are multiple and significant. First of all, there is a wealth of financial information available to both clients and consumers, which simplifies all types of transactions: credits, mortgages, loans and more instruments within their reach.

The automation of operations reduces the management effort of banks and institutions, making the services provided significantly more economical.

How to benefit from banking aggregation

In the case of companies, the direct benefit of this technology depends on the company’s own activity and strategies. However, it can improve business performance by providing reliable information not only on clients and customers or partners, but also on suppliers and other institutions.

Applications and systems that incorporate banking aggregation have a multitude of tools and functions that allow data to be analyzed in an orderly fashion and to obtain reports of different types: financial situation, volume of transactions, accounts and invoices, among many others.

Companies offering bank aggregation

The main providers of banking aggregation services in Spain are Tink, Eurobits and Kontomatik.

  • In the first case, Tink offers statistical analysis services for the main banks in the European Union.
  • Eurobits offers a collection and cataloging service for companies seeking to increase customer loyalty.
  • Finally, Kontomatik has a banking database that makes it possible to offer financial services of all kinds.

The communion between online banking and IT services dedicated to account management and personal finance makes it possible to improve the performance of companies. Banking aggregation represents the union between the two.

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