Germany

According to Merchant Machine, 93% of Germans had access to the internet in 2021. Of all Germans using the internet, 66% used the internet for online banking in 2019, which was the same as the EU average. Germany ranks 16th in the integration of digital technologies and 18th for digital public services among EU countries. 

Germany 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 their European Open Banking league, Yapily ranked Germany 2 out of 18 due to its strong regulatory supervision and use of Berlin Group’s API, which according to Yapily, is the most prescriptive after UK Open Banking. The roll-out of Open Banking in Germany continues to gain momentum. The country’s Open Banking success has been impressive, with the largest number of Third-Party Providers (TPPs) in continental Europe. However, Germany has low guidance provided around the implementation of Open Banking and could do with support in issuing regulatory guidelines around user journeys and customer authentication. 

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

Germany uses the Berlin Group standard, which is applicable to different European banking environments. 

According to The Global Findex Database, 100% of German adults had bank accounts in 2021.  In a recent study researching the Open Banking adoption among consumers, German consumers scored higher than average Europeans in all areas measured. 37% of German consumers were interested in receiving intelligent assistance to manage payments, 38% were interested in having their data used to develop convenient new payment methods, 31% having their data used in aggregating financial information and storing it in one place and 32% in having their data used to offer a better range or better quality of services.

According to Yapily, Germany’s slow adoption rate of Open Banking is generally due to two factors. The first being poor guidance on the appropriate implementation of Open Banking, leading to various interpretations. Secondly, cultural attitudes towards using digital payment methods. Traditionally, Germany has been a cash-based economy, making migrating to new payment methods challenging. However, with the global pandemic accelerating existing trends towards digital, Open Banking adoption has been steadily increasing in the region since 2020. 

As the adoption rate of Open Banking has been generally slow in Germany, Yapily suggests that the regulatory bodies in Germany could do more to increase the awareness of the benefits attached to Open Banking on the public policy side.

946 Fintechs operated in Germany in 2021, which offer services mainly related to alternative payment methods, automated portfolio management, blockchain technology, crowd-funding and virtual currencies.

Germany ranks 16th 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.

BMWi (the Federal Ministry for Economic Affairs and Energy – a supreme federal authority) has created the Digital Hub Initiative, which supports the establishment of Fintechs in Germany and aims to help transform Germany into a leading digital centre.

Germany has adopted Berlin Group’s NextGenPSD2 technical standard.