With new financial regulations comes great opportunity, and one London-based startup wants to be the middle man for the open banking era. By providing access to the newly opened data streams being released by major banks across Europe, TrueLayer wants to power fintech startups looking to build innovative financial applications for users.
Just as opening up Transport for London’s data allowed Citymapper to build a best-in-class navigation app for Londoners back in 2012, now a whole host of fintech startups are looking to do the same with people’s financial data. This could be by coaching people to better use their money by accessing recent transactions, comparing financial products to get customers a better deal, or offering more seamless payments or lending options.
As new open banking regulations come into effect this year, with the second payment services directive (PSD2) in Europe and open banking in the UK, approved startups can start to build applications on top of people’s actual financial data (once given permission of course), direct from the banks via an application programming interface (API).
Few fintech startups are betting the farm on the concept of open banking as much as TrueLayer is, building an API (actually two APIs, but I will get to that later) enabling turnkey access to the newly opened banking data without fintechs having to design their own integrations.
Cofounder Francesco Simoneschi came up with the idea while working at the San Francisco venture capital firm Mission and Market, which he also cofounded.
“I started seeing the banks becoming more of a utility,” he explained. “On top of payments and money holding, a new breed of companies were building new ways for consumers to manage their finances. So there must be something connecting those two pieces together.
“The companies want to innovate user experience and create value, not worry about the underlying banking infrastructure, so that’s where TrueLayer comes in.”
So Simoneschi moved back to London – where he studied economics at LSE between 2011-2013 – to set up TrueLayer with his cofounder Luca Martinetti. They raised $4.5 million (£3.2 million) across two rounds of funding from the likes of Connect Ventures and Anthemis Group, and set out to create the core APIs customers would come to them for.