As the financial industry undergoes a transformation driven by Open Banking, new types of players are emerging, offering innovative ways to manage and use financial data. The second article of our series offers a comprehensive overview of Account Information Service Providers (AISP) within the Open Banking ecosystem, detailing their role, operational framework, and the added value they bring to financial management for both individuals and businesses. While PISPs enable payments, AISPs specialize in giving users control over their financial data, offering insights and tools to manage their finances more effectively. 

What is an AISP? 

An Account Information Service Provider (AISP) is a third-party provider authorized to access and aggregate financial data from a customer’s various bank accounts, with their explicit consent. Unlike PISPs, which initiate payments, AISPs do not have the ability to move money. Instead, they retrieve data from one or more bank accounts to offer users a comprehensive view of their financial situation. 

For example, if a user has accounts at multiple banks, an AISP can pull all transaction histories, balances, and other account data into a single platform, making it easier for the user to manage their finances, budget, and plan for the future. 

AISPs have become particularly popular in personal financial management (PFM) tools, helping users to better understand their spending habits, track savings goals, and receive personalized financial advice. 

How AISPs Work 

AISPs operate within the regulatory framework of PSD2, which requires banks to open access to customer data (with the customer’s consent) via secure APIs. Here’s how the process works: 

1. User Consent: The customer authorizes the AISP to access their financial data across one or more accounts. This consent is given through Strong Customer Authentication (SCA), which typically involves multi-factor authentication. 
2. Data Retrieval: The AISP uses bank-provided APIs to pull information such as account balances, transaction histories, and loan details from the customer’s accounts. 
3. Data Aggregation and Analysis: The AISP aggregates the data, presenting it in a user-friendly interface that provides insights into spending patterns, savings, debts, and other financial activities. 
4. Personalized Financial Advice: Many AISPs use advanced analytics and algorithms to offer personalized recommendations, helping users improve their financial habits, achieve savings goals, or manage debt. 

This real-time access to data not only empowers consumers but also enables businesses, like fintech companies and financial advisors, to provide more personalized and actionable financial services. 

Let’s take a closer look at how an AISP works. As you can see on the figure below, an AISP builds connections to multiple banks (ASPSP) and to the Payment Service Users (Businesses and Consumers). The connections to banks should be implemented through standardized APIs (application program interfaces). The Payment Service Users maintains the connections to their banks and give a formal consent to the AISP to access their account and collect data.  

The AISP becomes the middleman between the PSU (Payment Service User) and all her/his banks and takes care of retrieving PSU’s account, transaction and balance information from all her/his accounts provided the PSU has given consent. To get the full picture (EU and outside), global companies operating in multi-currency locations should authorize AISP to receive their statements in SWIFT MT94X / camt.054 formats as well. The practice of requesting an account servicing institution to send account statements to a party authorized by the account owner to receive the information is very common in the SWIFT World. 

Account Information aggregation presented in a user-friendly manner fulfills only basic needs. Companies have other needs that AISP will certainly address: analytics and insights. AISP can allow PSU to do budgeting, understand their spending patterns, set financial goals and much more… Analytics and insights is creating and will create immense business opportunities for AISP in the years to come.  

Like PISPs, AISPs provide their services mainly through Web and mobile applications that PSU will access to consume their services. 

Common Use Cases for AISPs 

AISPs offer a wide range of services that enhance financial management for individuals and businesses. Here are some of the most common use cases: 

• Personal Financial Management (PFM): PFM tools powered by AISPs allow users to track their income, expenses, and savings in real-time. These platforms offer insights into spending habits, help with budgeting, and set savings targets. For instance, users might see how much they spend on groceries or travel each month, enabling better financial planning. 

Example: Yolt, previously a popular PFM app, acted as an AISP, aggregating data from multiple bank accounts to provide users with an overview of their finances. 

• Credit Scoring and Lending: AISPs enable lenders to gain a clearer, real-time picture of a potential borrower’s financial health. Instead of relying solely on traditional credit scores, lenders can assess income, spending, and financial commitments directly, leading to more accurate and personalized loan offers. 

Example: Credit Kudos uses data from AISPs to offer improved credit assessments based on a user’s actual financial behavior rather than just credit history. 

• Financial Product Comparison: AISPs can help users compare financial products such as loans, mortgages, and insurance based on real-time financial data. By analyzing the user’s financial situation, AISPs recommend products that fit their needs better than generic offerings. 

Example: Moneyhub aggregates user data to provide insights and help users compare various financial products, offering tailored recommendations. 

• Business Finance Management: Small and medium-sized businesses (SMBs) can use AISPs to consolidate their financial data, such as income, expenses, and cash flow, across different accounts. This improves financial visibility and decision-making, especially for businesses that operate across multiple banks or use different currencies. 

Example: Xero integrates with AISPs to offer businesses a full view of their financial health, making accounting and cash flow management easier. 

Advantages of AISPs 

AISPs bring several key advantages to both consumers and businesses by providing real-time, data-driven financial insights: 

1. Financial Transparency: AISPs give users a complete overview of their financial data in one place, even across different banks, providing clarity and transparency in financial management. 
2. Better Financial Planning: By offering tools for budgeting, savings, and investment tracking, AISPs help users make more informed decisions about their financial future. This can lead to better savings habits and more controlled spending. 
3. Personalized Financial Advice: AISPs often offer users tailored recommendations based on their unique financial behavior. This could include advice on cutting expenses, managing debt, or optimizing savings. 
4. Streamlined Access to Credit: AISPs allow lenders to access real-time financial data, enabling more accurate and personalized loan offers, which can benefit individuals with non-traditional credit profiles. 

Challenges for AISPs 

Despite the clear benefits, AISPs face several challenges as they operate in a heavily regulated and competitive environment: 

1. Data Privacy and Security: Since AISPs handle sensitive financial data, ensuring robust security measures and adhering to GDPR (General Data Protection Regulation) is essential. Data breaches or mishandling of information can lead to significant trust issues and regulatory penalties. 
2. Building Consumer Trust: Many consumers are still hesitant to share their financial data with third-party providers, even when regulated by PSD2. AISPs must clearly communicate the benefits and security of their services to gain widespread trust. 
3. API Standardization: While PSD2 mandates that banks provide APIs, the lack of standardization across different banks can make it difficult for AISPs to integrate seamlessly. This increases complexity and development costs. 
4. Regulatory Compliance: Alongside PSD2, AISPs must comply with various other regulations related to data protection, including Strong Customer Authentication (SCA). Ensuring compliance while maintaining a seamless user experience can be a challenge, especially for smaller fintech companies. 

The Future of AISPs in Open Banking 

As Open Banking continues to grow, the role of AISPs is expected to expand in several ways: 

1. Expansion into Open Finance: AISPs may extend their services beyond banking data to include information on insurance, investments, pensions, and other financial products. This shift, often referred to as Open Finance, would provide even deeper insights into a user’s financial life. 
2. Global Adoption: While AISPs are well-established in Europe due to PSD2, other regions, such as Australia (with its Consumer Data Right regulations) and the United States (via voluntary frameworks like FDX), are beginning to implement similar models. As Open Banking becomes more widespread globally, AISPs will have greater opportunities to scale their services across borders. 
3. AI and Machine Learning Integration: Many AISPs are already leveraging artificial intelligence (AI) and machine learning to provide more personalized financial advice. As technology advances, these tools will become even more powerful, helping users make smarter financial decisions with minimal effort. 

Conclusion 

Account Information Service Providers (AISP) have become essential players in the Open Banking ecosystem, giving consumers and businesses greater control over their financial data. By providing transparency, personalized insights, and better financial management tools, AISPs are revolutionizing the way we manage our money. 

As Open Banking continues to expand, AISPs will likely play an even larger role in shaping the future of finance, making the industry more accessible, data-driven, and user-centric. In the next article of this series, we’ll explore Payment Instrument Issuer Service Providers (PIISP) and their role in ensuring secure and reliable payments. Stay tuned!