Everything you need to know about finAPI

Who or what is finAPI?

When it comes to Open Banking and various financial services in Germany, it’s hard to get around finAPI. The Munich startup was founded in 2008 and has developed rapidly since then.

After entering the market in 2011 as one of the first PFM providers for banks, finAPI increasingly focused from 2016 on developing the first intelligent banking interface for corporate financial tasks. In 2017, internationalization followed and the offering was expanded to include international banks.

In 2019, the German fintech then received the “license to provide payment initiation services” (PIS) from the Federal Financial Supervisory Authority (BaFin) and is also officially registered as an account information service (AIS) in accordance with the Payment Services Supervision Act (ZAG).

In the same year, SCHUFA Holding AG acquired a majority stake in the still relatively young company and intensified cooperation in the area of Open Banking.

What exactly does finAPI do? – finAPI’s product solutions

Open Banking Solutions

As a licensed payment initiation service provider and account information service, finAPI provides a banking interface. Non-licensed companies can access this service in order to offer financial services themselves and thus meet the high BaFin requirements. finAPI provides the necessary banking interfaces, XS2A servers for banks, and also P2D2 licenses.

But one thing at a time.

A banking API or banking interface is needed when it comes to account access or multibanking. “Account access” in this context means that fintechs, payment service providers, or financial products—such as our Salesforce-native banking app millio—are given the permission and technical means to retrieve and display account information. It is therefore about a secure connection between bank accounts and users. The connection can be established with both private and business accounts as well as different account types (e.g., checking, overnight deposit, savings accounts, or even PayPal accounts)—but of course never without the account holder’s consent and agreement.

In addition to national banks, international banks and accounts can also be connected via the banking API. finAPI currently offers the possibility to address German, Austrian, Czech, Slovak, and Hungarian banks via the banking interface. Further country connections are planned as the company grows.

Another option to enable companies to establish financial services as their own business model without having to go through BaFin licensing themselves is finAPI’s P2D2 License as a Service.

First of all, it is important to know: Anyone who generally wants to provide account information services (AIS) must be registered with BaFin as an account information service provider. A full BaFin license is mandatory if payments are also to be executed (payment initiation services, PIS).

The process of registration and licensing by the Federal Financial Supervisory Authority is not only costly and time-consuming, it is also complex. With finAPI’s P2D2 license, companies can skip this process and still offer financial services in compliance with the law. The financial functions offered are then processed not through the company itself but securely via finAPI.

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Data Intelligence

Data Intelligence is the second area finAPI specializes in. With finAPI Data Intelligence solutions, intelligent analyses are possible in order to develop an even deeper understanding of one’s (corporate) finances and create a certain degree of planning reliability.

The individual solutions include:

• automated categorization of transactions and account movements,
• cash flow analyses to help companies better assess the financial situation of customers,
• various payment risk analyses,
• intelligent contract recognition that simplifies contract management, or
• liquidity checks, in which a one-time authorized look at accounts can be used to prove one’s solvency.

In this area, finAPI offers particularly interesting possibilities for companies to rethink and use finances in a completely new way.

KYC

KYC is the abbreviation for “Know your Customer.” The term generally refers to the identification or verification of new and existing customers due to anti-money laundering requirements.

In particular, credit and financial institutions are increasingly being obliged by stricter EU requirements and the amendment of the Money Laundering Act in 2020 to participate in the detection and prevention of money laundering, terrorist financing, and economic crime.

Those primarily obligated to carry out this check are banks and credit institutions, financial service providers and companies, lawyers, notaries, auditors and tax consultants, as well as insurance companies.

It is clearly regulated which data must or may be checked and recorded in this process. Minimum requirements of KYC checks are the identification of the contractual partner, the declaration of ownership structures and the beneficial owner, as well as the clarification of economic backgrounds.

In this area too, finAPI offers innovative and legally compliant solutions to support customers in the digital KYC process and to comply with legal regulations and obligations accordingly.

Payment

With the payments API, finAPI offers an interface for online payment processing for corporate accounting and online shops. In this way, finAPI—among other things for our Salesforce app millio—enables SEPA payments by transfer, direct debit, bulk transfer, and bulk direct debit.

Is finAPI reputable and secure?

finAPI offers Open Finance software “Made in Germany” and is subject to strict German and European guidelines, regulations, and obligations in order to offer its services. finAPI is also officially licensed and supervised by the Federal Financial Supervisory Authority (BaFin).

And finAPI has also officially received authorization from the Austrian Financial Market Authority (FMA)—an independent supervisory authority for the financial market in Austria—as a payment initiation and account information service.

Another important point that creates a great deal of trust is the company’s affiliation with SCHUFA Holding AG. In 2019, SCHUFA Holding AG acquired a majority stake in finAPI. This gives finAPI a strong and reputable partner at its side whose name is quite familiar.

finAPI has been developing intelligent financial software for years and draws on a great deal of experience and expertise. The interfaces and services are continuously further developed in compliance with the highest security standards, also because the company is aware of the sensitivity of the data.

So this question can be answered with a clear “yes”: finAPI is absolutely reputable and secure.

And what exactly does finAPI have to do with millio?

As you may have already inferred in some places, the Salesforce banking app millio also relies on finAPI’s secure XS2A interface and PSD2 license to connect business bank accounts with the company’s own Salesforce system.

The interface enables the clear display of account data, allows multibanking, as well as the execution of transfers, direct debits, and smart receivables management—and all of this directly in Salesforce.

At first glance, the connection between account data and CRM/ERP may not seem obvious, but it opens up unexpected potential in the area of corporate process optimization and digitalization.

Do you find the topic exciting? Then discover more information here: https://www.millio.com/

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