Coop Pank: Bringing Open Banking to Estonia

Tietoevry Banking worked with Coop Pank to bring market-leading Open Banking services to Estonia and pave the way for advanced Open Finance solutions in the future.

Background:

Bringing Open Banking to Estonia

Coop Pank is a top-five Estonian Bank, established in the nineties by Estonian consumer co-operatives and their clients.

This position has given Coop Pank unique access to relationships with retailers, offering financial services across the 320 stores in the Coop Eesti Keskühistu member association network across Estonia.

Coop Pank has a deep commitment to its customers. It is particularly strong in retail banking services, mortgages, consumer loans and card products, as well as savings offerings from deposits to pension funds.

Since 2017, the bank has seen its business grow five-fold, both in terms of customer numbers and its lending portfolio.

 “With a deep commitment to its customers, Coop Pank has the strategic goal to grow its market share to 10% by 2027.”

Over the next three years to 2027, Coop Pank has the strategic goal to increase the bank’s market share in Estonia to 10% with a loan portfolio of €2 billion minimum.

By implication, one in 10 Estonians will be a customer of Coop Pank (approximately 150,000 customers). These increased business volumes will enable the bank to achieve greater efficiency (including a maximum cost/income ratio of 50%) and offer shareholders a higher return on equity of around 15%.

The Challenge:

Coop Pank faced the challenge of aligning its growth objectives with the evolving regulatory landscape shaped by the PSD2 (Second Payment Services Directive) mandate.

This regulation requires banks to open their payment services and share customer data securely with authorised third-party providers, promoting competition and innovation in the financial sector.

In response, Coop Pank aimed to implement a set of Open APIs (Application Programming Interfaces) to facilitate secure data sharing and access.

This move was essential not only for compliance with regulatory requirements but also to strengthen Coop Pank’s competitive position in the market by embracing the principles of Open Banking.

Ultimately, Coop Pank’s strategy reflects a balanced approach to regulatory compliance and market-driven innovation.

By implementing Open APIs as mandated by PSD2, the bank has ensured it can meet regulatory standards while also taking advantage of new market opportunities.

This enables Coop Pank to stay competitive, enhance the customer experience, and drive growth through innovative services that align with both regulatory demands and technological advancements.

The Solution:

Even before the PSD2 regulation came into force, Coop Pank had selected Tietoevry Banking to ensure regulatory compliance based on their proven track record of successful project delivery and their expertise in Open Banking.

Tietoevry Banking delivered a set of live Open API connections within six months.

The first step was to establish a “sandbox” environment, as required by Estonia’s regulator, to enable test connections between Coop Pank and other businesses, particularly retailers and financial service providers.

Following this, Tietoevry Banking developed a set of live APIs and integrated their Open Banking systems with Coop Pank’s core software systems, completing this process in four months.

The Benefits:

The implementation of PSD2-mandated services has enabled Coop Pank to significantly expand its range of offerings beyond traditional banking services and channels.

By leveraging required services—such as Account Information Services (AIS) and Payment Initiation Services (PIS)—Coop Pank now provides financial services that are more easily integrated with Third-Party Providers (TPPs), enhancing customer engagement and satisfaction.

“Coop Pank has already seen an uplift in transaction volumes based on the new system.”

Since adopting PSD2-compliant Open Banking services, Coop Pank has experienced a substantial increase in transaction volumes. The bank is now exploring new product lines and revenue streams driven by the capabilities offered by these mandatory services.

Looking ahead, Coop Pank is preparing for the arrival of the EU’s third payment services directive (PSD3) in 2027/2028, which will pave the way for Open Finance – the provision of all kinds of financial services through one platform, including creative new offerings from providers combining their services.

Coop Pank has ambitious plans for new services, which it plans to build using a special development portal based on the Tietoevry Open Banking platform to reduce development time and make product testing easier.

The bank is currently exploring use cases and how to position new products to be developed using this system.

Tietoevry Banking is a leader in the delivery of European Open Banking systems. Find out how these services can add value for your bank: www.tietoevry.com/open-finance

 

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