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Open Banking

Open Finance

In southeastern Europe, Bulgarian banks are relatively slowly adjusting to digital changes.

According to Merchant Machine, 63% of Bulgarians had access to the internet in 2021. Of all Bulgarians using the internet, 13% used the internet for online banking in 2019, which was 53% below the EU average. Bulgaria ranks 26th in the integration of digital technologies and 25th for digital public services among EU countries.  

Bulgaria falls under the PSD2 legislation and has adopted Berlin Group’s NextGenPSD2 standard. PSD2 is a European Directive that regulates electronic payment services and was implemented in all EEA countries in 2016 and went live in September 2019. In Bulgaria, PSD2 is being implemented through the passage of an entirely new statute, the Act on the Payment Services and Payment Systems, which repeals and replaces the existing Payment Services and Payment Systems Act.

The EU Commission has announced its intention to adopt an Open Finance regulatory framework.

According to The Global Findex Database, 84% of Bulgarians had bank accounts in 2021, leaving 16% unbanked. Open Banking and Open Finance are opportunities to address financial inclusion in Bulgaria. As mentioned, 13% of Bulgarians who use the internet used it for online banking in 2019. This is due to Bulgarian banks, similar to their consumers, adjusting to digital and technological changes relatively slowly, in contrast to the growing number of Fintech companies. Although many Fintechs operating in Bulgaria focus on foreign markets.

In a recent study researching the Open Banking adoption among consumers, Bulgarian consumers scored higher than average Europeans in all areas measured. 43% of Bulgarian consumers were interested in receiving intelligent assistance to manage payments, 38% were interested in having their data used to develop convenient new payment methods, 33% having their data used in aggregating financial information and storing it in one place and 34% in having their data used to offer a better range or better quality of services.

Open Banking and Open Finance are opportunities to address financial inclusion in Bulgaria. 

In 2021, 135 Fintechs operated in Bulgaria, 95% of which are SMEs.

Bulgaria ranks 26th in human capital among EU countries in the Digital Economy and Society Index (DESI) 2022. The human capital measures digital skills, the proportion of employed people working as ICT specialists, female ICT specialists, and enterprises offering ICT training.

Bulgaria has been planning on introducing a regulatory sandbox, Sofia sandbox, since 2020; however, the practical implementation has been lacking. The director of the Bulgarian Fintech Association has announced initiatives that can help promote Fintechs, such as the innovation hub, the regulatory sandbox and the industry sandbox.

Bulgaria has developed the BISTRA standard to incorporate the Berlin Group’s  PSD2 Access to Bank Accounts (XS2A) specification with specific local money transfers.