The platform economy, today’s economic and/or social online matchmaker, is set to transform another industry – financial services. To keep up, banks will need to adapt their business models to an outside-in approach that recognizes the importance of openness and collaboration in developing personalized products and services that enhance the banking experience for customers and enable them to manage their finances holistically.
When it comes to something as highly regulated as the banking industry, open source may not be the obvious technology to choose. However, with the rise of Open Banking — which likely came about as an answer to what is probably the most often cited regulatory requirement for financial institutions
Until very recently, financial data pertaining to a customer’s account information was made available only to his/her own bank. But since January 13, those rules have changed.
API-based Open Banking, a financial technology born in Europe to achieve enhanced transparency, is among the latest banktech innovations that seem intent on shaking legacy banking systems to their core. The good news is that both customers and their banks alike stand to gain from the more competitive environment and stricter data processing that will result from its widespread adoption.
Introduced in 2015, PSD2 grants third party providers (TPPs) access to bank customers’ (both consumers and businesses) online account & payment services in a secure and regulated manner.
Change has become the key word for European Union banks, and the European Commission’s Revised Payment Services Directive, set to come into effect next January, promises to level the playing field for banks and fintechs as well as uphold consumer rights, while also possibly changing the face of traditional European banking beyond recognition. How are banks coping with the challenges and demands of the PSD2?
Regulatory change is coming, geared towards increasing competition and innovation in retail banking. This is good news for customers. In August this year, the Competition and Markets Authority (CMA) released recommendations arising from its investigation into the retail banking sector.