Big data technology has been the basis for the Fintech industry. There is no disputing the major benefits that big data has created for the financial sector.
However, there are also new challenges that have arisen as big data has become more widely available in Fintech. One of the biggest changes is new regulations. Fintech businesses must make sure that any data scientists working for them are licensed and trained to handle tasks with the utmost sensitivity.
One of the most regulated aspects of the Fintech industry is AISP, due to the vulnerability of people that might have their data exposed by people working in this field. You need to make sure that you are properly licsensed if you intend to offer AISP services as a data-driven financial company.
Getting an AISP License as a Fintech Company Relying on Big Data
It goes without saying, Payment Services Directive (PSD2) opened the way for new Fin-Techs to launch. Unfortunately, PSD2 regulations are applied only in the European Union and the European Economic Area. Account Information Service Provider (AISP) is authorized to send and receive account data from banks and other financial institutions. This data can be used for various purposes and could be extremely beneficial for end users. At the same time, online service providers who have AISP licenses can stand out and amaze with better customer experience.
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Not only Fin-Techs can apply for AISP license, in some cases banks, insurance companies and other organizations use it for several reasons. Institutions can have both AISP and PISP (Payment Initiation Service Provider) licenses at the same time and carry out related activity.
Typically, authorized AISP license holders with the permission of users can get private information on other platforms. This solution works for safer banking and financial transfers as much as registering and signing to other platforms in a few times faster way. AISP technology allows to receive user data but doesn’t allow to make any financial transaction. Received information is mainly used for analyzing separate service providers and monitoring all of them on one dashboard. Anyway, the AISP licensing process is strict and time-consuming.
To get AISP license, organizations must hold Professional Indemnity (PI) insurance. It can be applied for business or self-employed freelancers. This type of insurance covers any cases where any financial loss is made by the customer‘s or organization‘s fault. So it‘s good to know that even if something may go wrong, there will always be a third party who will compensate for the loss of money or data.
As mentioned before, PS Directive is a great opportunity to start a Fin-Tech business by creating and representing a brand new, never-before-seen service or by improving one that exists but could be provided in a transformed format.
The AISP license is not easy to get. First, you must fill in an application form. It involves the business plan, all the legal information about the company, and why AISP is necessary in your business. All the documents and agreements must be provided to meet strict requirements. Also, you must ensure that your system is safe enough and use the required safety protocols. Funds and personal information are too valuable to be lost. The only way to do it – a compliance demonstration.
Your idea of an AISP-based system must be fulfilled and prepared without skipping any step. AISP technology is being developed, but there are still many undiscovered methods of use that must succeed.
PSD2 opened the new page of EU/EEA online services. To regulate this sector was a great idea, and the most benefits are felt by end users. Traditional banks now have new-age competitors who correct the prices of some services and make traditional banking come along with the latest trends. Glad that in this situation the maximum benefit is to the end user.
Data-Driven Fintech Companies Must Get a License Before Offering AISP
Big data has been highly useful in the Fintech sector. More companies are using sophisticated big data tools to offer services like AISP. However, you need to make sure that your company is properly licensed first.