Name
Global FinTech Guide
Country _ Name
Spain
SectionTitle
Online banking services
Body
FinTechs belonging to this area offer traditional banking services in a modern way, usually through online services or mobile applications as well as ancillary services – e.g. enabling customers to manage their giro- or custody-accounts online and in real time or offering e-wallet services. Keywords in this context are also API-Banking or Banking as a Service (BaaS)/ Bank as a Platform (BaaP).

API-Banking:  

API stands for application programming interface and is offered to access data banks and to extract and insert information. API-Banking consequently means the access to data banks of banks to offer new and innovative banking applications.

Through these services FinTechs offer services with new functions, e.g. enabling customers to manage their accounts online and in real time.

BaaS – Bank as a Service/BaaP – Bank as a Platform:
 
The API-based Bank as a Service platform has a full banking licence, but merely serves as the back end for standalone independent FinTechs, which “use” the licence and the back end of the bank to offer new financial services, launch additional financial products or expand into additional markets.

Introduction

Attitude of the country towards online-banking services

Traditional banks are swiping to online-banking which is less costly to run (no offices, less employees) and traditional banking are beginning to disappear. There is a group in Spain which has organized protests against banks for not providing traditional banking services to older people anymore, since many aged people have difficulties in using new technologies. The Government has supported these protests.

Legal affairs

Obligations and requirements to provide online-banking services described above

 There is no specific regulatory framework governing online banking. However, online banking services take deposits from the public, which are used for on-lending. In such case, online banking services may be provided only by entities that have a license.

Banks in Spain need an authorization from the Bank of Spain as well as an authorization from the European Central Bank (“ECB”). 

As for the ECB authorization, they published a guide in March 2018 as a result of the growing number of entities with FinTech business models that are applying to enter the financial market. Among others, the guide points out the following requirements:

  1. In the executive committee of the FinTech there must be at least one person responsible for technologies at the highest level.
  2. The suitability of the shareholders of the FinTech company. Their experience, technical solvency and reputation will be evaluated.
  3. The suitability of the members of the management team. Their experience, technical solvency and reputation will be evaluated.
  4. The internal organization structure of the FinTech
  5. The capital, the liquidity and the solvency.
  6. Risk prevention (fraud) and cybersecurity policies

With respect to the Bank of Spain authorization, FinTech entities will have to meet certain requirements, more or less strict, depending on the type of license that the new company wants to achieve.

In general terms, the main points to obtain the license are the same as the one required by the ECB: The solvency of the FinTech company, the experience of its shareholders and members of the management committee, a good administrative and accounting organization and 
adequate internal control procedures.

In Spain, the types of licenses are the following:

  • Credit institutions (i.e banks, savings banks and credit unions). They are the only ones that can c
ollect reimbursable funds from customers, that is, receive a user's balance with the commitment to return it under the agreed conditions (offer deposits or bank accounts), among many other products. It is the most complete and complicated license to obtain. 
  • Other entities. To perform other types of financial activities, such as lending money by means of loans and credits, it is not necessary to have this license. There are other non-bank credit companies that can perform certain financial roles without becoming a bank. Each one has a special license according to its function. The main ones are:
- Financial credit establishments (“Establecimientos Financieros de Credito”) specialized in the granting of credits and loans in a specific field for example consumers. An example of Spanish company is Cofidis.

- Payment entities (“Entidades de Pago”) intended to provide payment services. They allow opening an account, entering and withdrawing money and making balance movements. Example: American Express Spain

- Electronic money entities (“Entidades de dinero electrónico”) are companies dedicated to the issuance of electronic money. They are enabled to issue, distribute and reimburse customers' money, as well as offer linked means of payment, such as PayPal and some neo banks such as B-Next

- Mutual guarantee societies (“Sociedad de Garantía Recíproca”) are non-profit entities specialized in offering guarantees to facilitate access to financing for small and medium-sized companies. They are usually linked to a specific sector and their activity is supported by their public protective partners (regional or local administrations), savings banks, etc. 

- Appraisal entities are dedicated to real estate appraisals and certify the value of these for different purposes, such as the granting of financing with mortgage guarantee. 

- Exchange establishments are entities specialized in facilitating the purchase and sale of foreign currency. Sometimes they combine this service with other activities, such as hotels in tourist areas.

Additional comments regarding the legal situation for online-banking services or what FinTech’s must be aware of in this business area

N/A

Economic conditions

Market size for online-banking services and biggest companies in this business area

No public data available.

Additional comments regarding the economic situation for online-banking services or what FinTech’s must be aware of in this business area

N/A

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