Yolt Technology Services (YTS), an open banking provider, has hit another milestone in its journey after being granted a PSD2 license from the FCA. This means YTS can continue with payment services activities that include Payment Initiation Services (PIS) and Account Information Services (AIS) under its own independent FCA license, as opposed to that of shareholder ING – marking a significant growth milestone for the business.
Since making its first successful API call in 2018, YTS has been providing PIS and AIS services to top financial institutions and ambitious tech businesses across the UK and Europe, operating under ING’s banking licence. Now, after a period of rapid growth, YTS has taken on full responsibility for its operations and obtained its own FCA licence to fully realise the open banking potential in the UK market.
The FCA license will help YTS further its ambition to spread the benefits of open banking far and wide, with YTS now able to extend its regulated services to businesses without a PSD2 licence too. This will typically benefit small businesses that are looking to validate if open banking could elevate their own business.
Regulatory approval also addresses one of the major blockers to widespread adoption of open banking – data security concerns.1 The FCA process thoroughly tests the proposition and scrutinises areas such as compliance, IT security and processes. As an original venture of ING Bank, security is part of YTS’ DNA and it has been able to demonstrate its robust security and risk management controls. Within this framework, YTS can help businesses to seek opportunities in open banking while YTS takes care of the regulated part.
Leon Muis, Chief Business Officer at Yolt Technology Services said: “This is a significant milestone and shows just how far we’ve come since launching Yolt Technology Services into the UK market in September 2019. From making the first-ever open banking API call for our client, the Yolt app, to surpassing one billion API calls in 2020, to now obtaining our own FCA licence, which will help us realise our ambition to bring the vast benefits of open banking to even more businesses.”
The news comes on the back of sustained momentum across the UK open banking market. Over 2.5 million UK bank customers now connect their accounts to trusted third parties using open banking, up from 1 million in January 20202, and API call volumes are growing 10-15% month-on-month.3 This looks set for continued growth in 2021, with 46% of respondents in a recent YTS survey4 stating they were considering adopting open banking technology, or another service like AIS in the near future.
Payment Initiation Services (PIS) are expected to make significant strides this year, in light of Covid-19, as businesses seek more cost-effective means of accepting payments. One example is the travel industry where there is a critical opportunity to reduce transaction fee costs on high-value payments.
Muis added: “Open banking has enormous potential to revolutionise the way both businesses and customers process and access financial information, ultimately delivering increased efficiency and richer insights for businesses, which is especially pertinent in a post-Covid and post-Brexit world. Our ambition is to drive this revolution across Europe.”