BBVA API Market
Along with payment initiation services (PIS), account information services (AIS) are one of “the services provided by certain specialized entities on customer accounts in other entities” that were left out of PSD1, as reported by the Bank of Spain, and which are now accessible through APIs under PSD2.
With the release of the AIS service under PSD2, customers (data owners) may give permission to third parties to “operate or obtain information from accounts that the customer has in other entities.” As a result, it is possible record credit card, investment, or other account entries in one single location, such as an application outside the bank.
Account information services (AIS) allow customers (owners of the information in their respective bank accounts) to give third parties permission to read, group and process this information. As such, the main advantage lies in streamlining the banking system, increasing transparency, achieving better data quality and reducing costs.
This means that two companies whose accounts, at any given time, are virtually identical can offer their common provider access to their aggregate banking information. This enables the provider to view the financial information grouped together, and determine each company’s ability to pay based on its previous history. In other words, it will have truthful information about the companies’ standard behavior.
In their own way, these two companies can use account information service providers (AISPs) to improve their knowledge of themselves. This is especially interesting when a company has a wide range of bank details, each in a specific account, and even more so when they are with different banks.
In short, PSD2 account information services allow the unification of bank data and facilitate its further analysis, often through third-party APIs such as Accounts PSD2 or Funds Confirmation PSD2, both available at BBVA API_Market. AIS providers are called AISPs.
Data which may undergo AIS aggregation under PSD2 is all data derived from bank or accounts through banks, such as:
The most important factor is that AIS service provision is subject to the account information owner’s permission.
Payment initiation services (PIS) are services that, through an intermediate platform called “payment initiation provider” (PISP), allow customers to make digital payments with added features such as instant notifications or pull payments (such as direct debits). The latter is possible through APIs such as Payments PSD2, which are payment initiation services (PIS).
On the other hand, account information services (AIS) do not operate the authorized accounts, but can instead collect all the information derived from debts or funds coming in and going out of these accounts. The AIS provided under PSD2 goes far beyond any previous screen scraping system (a programming method that uses reverse engineering to extract a representation of data displayed on a screen) or any manual aggregation system. It is an automatic system.
One of the most frequent uses of this possibility opened by PSD2 is to know quickly and at all times the status of a certain group of accounts, and to answer questions about future liquidity, trends, level of indebtedness or the rate of a possible bank loan based on responsiveness.
The most basic versions of these account information services are personal finance applications: with the permission of their users, they access their accounts and unify collections or payments in the same location, and may also show a graphical representation of the savings trend or rely on a third party to determine the most frequent or the most substantial ant expenses.
The same applies to AIS for businesses: they can identify the company’s financial needs, as well as any unhealthy behavior patterns such as chronic lack of liquidity, poor credit situation due to over-indebtedness or actual returns when there are several separate lines of income.
This type of indexed data can also be used as the basis for justifying new loan applications, both internally to have the request approved, and externally (banks) to demonstrate some ability to pay and thus strengthen the application. In other words, going to the bank knowing that the loan requested is consistent with the company’s accounting situation.
Similarly, companies often need to know information about other companies they work with, either in real time or in grouped history. Account information service providers (AISPs) provide AIS services to be able to view this information without affecting the intellectual property of the “audited” company, which grants limited permissions.
As an example, the Funds Confirmation PSD2 API is an AIS service that informs the collector about the feasibility of payment transactions requested by the client, informing when there are no funds for such transaction, but without further revealing the client’s credit or accounting information. The goal is to know the transaction’s feasibility and avoid unexpected situations. To offer peace of mind and trust.
It is important to once again underscore that bank data is the property of clients. Thus, the data of accounts held through banks by Alpha S.L. and aggregated by an AISP are the property of Alpha. But the company can use APIs with AIS services to improve its transparency, sharing some of those details with Beta S.L. (for example, a provider).
These types of tools, available at BBVA API_Market, improve trust since Beta can confirm that Alpha can pay the amount agreed in a deal, and that its payment situation is optimal and with no defaults. And this explains the growing demand for banking APIs in a world of digitized companies.
Confirmation of funds is a service regulated by the PSD2 Directive intended to find out whether a certain customer has enough funds in their bank account when making a charge using their credit card.
The PSD2 Directive has boosted the use of APIs that improve the security and automation conditions with which payments are executed, such as BBVA Accounts PSD2, Funds Confirmation PSD2 and Payments PSD2.