During the Sibos sessions this year it was only natural that the compliance regulation of PSD2 was going to be spoken about.
Those who discussed the future of the financial industry, in regards to this regulation impacting it, many speakers were in favour for it to be implemented. For these speakers, they explained how the industry needs to look at PSD2 as a compliance directive, how it looks to find new ways to engage customers and how it aims too promote pan-European competition.
Giving a brief history and foresight into the regulation, four main provisions could be extracted from the talks. The benefits most widely discussed were; it will extend the scope beyond Europe, it standardises card surcharges, requires greater security in payments/ accounts and provides account access for third party providers through open APIs.
By accessing account and transaction information it paves the way for fintechs to play a bigger role in the payments industry. From this new entities will be introduced such as Account Information Providers(AISP), who’ll be able to provide a consolidated view of accounts and Payment Initiation Service Providers.
The issue around the regulation primarily comes fromm the fact that banks will have to invest a significant amount in security and extending APIs which is initially a burden however if looking at the big picture, will pay off.
The consensus of those who spoke about the regulation is that PSD2 is an opportunity to look beyond compliance. It can be an agent for innovation and banks can take on a role of an AISP. Naturally, the banks which decide to grab the bull by the horns and start creating APIs now will find it significantly easier to thwart newer competitors.