The Union Bank is the third bank in Albania to join the EBRD`s risk-sharing framework. This framework aims to help local partner banks meet the financing needs of successful businesses and small and medium-sized enterprises (SMEs). TCH`s edition of the agreement model reflects efforts to implement an open banking system in the United States, which take into account the guidelines of companies such as the CFPB and the U.S. Treasury. This runs counter to the UK`s general terms of sale for API users, which are a standard agreement that can be reached by API users (defined as individuals or organizations that choose to access open bank APIs). These terms and conditions are the product of Open Banking Limited UK`s (Open Banking) top-down regulatory approach and govern the relationship between Open Banking and each API user. TCH`s Connected Banking Initiative encourages innovation that allows customers to safely control how they pass on their banking data to third parties. The initiative also focuses on the development of Applications Programming Interfaces (APIs) that create direct links between banks and fintech. As a founding member of the Financial Data Exchange, TCH also encourages the use of the FDX API to enable secure and transparent sharing of financial data. The financial data exchange describes the function of the FDX API as follows: “The FDX API works in combination with specific frameworks for data sharing, secure authentication, data emanation and syntax. These elements will together make for the financial data sharing ecosystem what the basic Bluetooth specification for wireless device connection has done, allowing for standardization that makes it easier and safer for consumers to use financial data and applications to make good decisions. As part of risk-sharing, the EBRD offers partner banks risk-sharing programmes financed or not, in dollars, euros or local currency, under which the EBRD assumes part of the risk of under-loans granted by partner banks to eligible customers. While the use of APIs for secure sharing of financial data between banks and fintech has greatly increased, negotiating data exchange agreements is not without challenges.
Hunter is convinced that the Model Agreement will reduce cycles and sticking points when negotiating such agreements: “APIs have the potential to greatly benefit consumers, but the long process of reaching an agreement can become a bottleneck for the introduction of the API… Using the chord model as a benchmark to facilitate API agreements can optimize and accelerate the deployment of API technology. TCH is a U.S.-based company owned by some of the world`s largest commercial banks. TCH is also the parent organization of the Clearing House Payments Company, a payment organization made up of more than 1,000 members of financial institutions and corporate subscribers. The Model Agreement is part of TCH`s connected banking initiative, which aims to facilitate innovation, customer control and secure exchange of banking data. TCH developed the framework agreement in accordance with the principles of consumer protection: financial and financial consumer sharing and aggregation, issued by the Consumer Finance Protection Bureau (CFPB) on October 18, 2017. Rob Hunter (TCH), Assistant General, stated that “it provides a framework for how banks and fintechs can work together to implement the principles of the PCPB… “in the effort of “… Facilitate the efficient and secure exchange of consumer data.
In collaboration with its member banks and in agreement with Fintechs, TCH has developed a framework agreement that banks and aggregators/fintech can use as a reference to facilitate the development of data-sharing agreements related to the API. The use of the model agreement is entirely voluntary and the agreement must be amended if circumstances warrant.