Latvian fintech start-up Nordigen is disrupting open banking data access by launching freemium platform.
Riga-based fintech start-up Nordigen announced on December 1 the launch of the first ever free, open banking API (application programming interface) which will allow developers in companies of all sizes to access PSD2 (payment service directive) open banking data from major banks across Europe.
While Nordigen now offers free banking connectivity, it will also continue to provide premium data analytics and insight services, which it currently offers to more than 50 global fintech companies, banks, and lenders operating in 19 countries.
The company’s new platform provides connectivity to 29 countries in the European Economic Area, as well as the United Kingdom.
Company co-founder and CEO, Rolands Mesters, believes that this kind of freemium open access is the future of the industry.
“In Europe, the business model of charging for open banking data, as Tink and Plaid do, will soon be history. Nordigen is the first to launch a free open banking data service, but we certainly won’t be the last. We believe the future of open banking is in the freemium model and that the rest of the industry will soon follow,” he explains.
What Nordigen’s new API solves is a long-standing pain point for many fintech companies. Accessing open banking data can often prove to be prohibitively expensive, as other open banking data companies charge for every single connected end user. This means that the cost of access rises dramatically for fintech companies as they scale.
According to the company, the market can also be difficult to navigate because there are more than 380 AISPs (account information service providers) in Europe and each of them have their own pricing models and different API documentation.
For companies who wish to access open banking data, this makes access both expensive and technologically challenging. And since most providers do not offer data for the whole of Europe, companies often have to resort to a patchwork of different solutions.
Nordigen’s new freemium model of pan-European data access means that that the financial barrier is removed while the process of integrating into an open banking data platform is simplified.
The company says they can do this because it offers a lightweight technology stack that relies exclusively on PSD2 bank connections. Nordigen has built its platform with pure open APIs in mind right from the start, focusing on providing the raw banking data most developers are interested in a steady and robust way without the need for screen-scraping or reverse engineering.
“By removing the barriers to accessing financial data, we’re aiming to enable more companies to translate their ideas into reality and drive the innovation and competition open banking regulation was originally meant to foster,” Mr Mesters said.
He adds that the time is right for a freemium model of data access that will help fintech companies solve real-world problems.
“The Covid-19 pandemic is accelerating uptake and showing us a glimpse of the transformational potential open banking has to offer, but we need something more to help companies turn their bold visions into reality. Free access to open banking is that,” he says.
The company’s new freemium data platform complements its expertise in data analysis. Since 2016, the company has worked with clients across the globe to extract more value from data to help them make better decisions especially when it comes to assessing the creditworthiness of loan applicants.
Nordigen is planning to raise a Series A funding round in 2021.
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