PaymentsJournal
SUBSCRIBE
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
No Result
View All Result

Come Together Over PSD2

Maikki Frisk by Maikki Frisk
October 30, 2017
in Industry Opinions
0
Industry Participation in EMVCo Expands

business, education and office concept - serious business team with flip board in office discussing something

2
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn
Relevance to the consumer is the challenge for banks in the post-PSD2 era and partnerships hold the key, says Maikki Frisk, Executive Director, Mobey Forum

When PSD2 comes into effect in 2018, the unprecedented regulatory upheaval will compel banks to explore new business models, commercial strategies and operational practices. In the open banking era, collaboration will be key as banks move to employ partnerships not only to expand the range and quality of services they can deliver, but also to capitalise on the vast pools of untapped data they already hold.

The most immediate impact of PSD2 will be the proliferation of new, innovative banking applications and services from third party providers (TPPs). Contrary to what some banks may think, this is really good news for them.

Compared to other industries, the development of financial services has long been constrained by operational conservatism, stringent regulation and lengthy product development cycles. PSD2 will pave the way for change. By identifying and collaborating with high quality TPPs, banks can quickly and efficiently deliver the innovative digital services that consumers want. Fast movers here stand to gain significant competitive advantage.

There is an important caveat, however. Few banks will be content to hand over control of their customer relationships and rely entirely on a new portfolio of third party apps. Instead, banks will want to remain competitive by maintaining direct relationships with their customers. This means staying relevant, which brings banks straight back to how they can make the best use their customer data.

Despite the mandates of PSD2, banks still have a huge opportunity to use their vast pools of data to stay ahead of the market. Yes, PSD2 will force banks to make transaction data available to third-parties through APIs, and yes, this means that in some cases banks will lose the customer exclusivity they currently enjoy. Crucially, though, banks are not mandated to make all their data available. From this perspective, and for the moment at least, they will stay way ahead of the TPPs.

Banks can also act as TPPs themselves. Independently or, more likely, through commercial partnerships, banks can complement their own data with API calls to other banks, aggregating more data points than an independent TPP could do alone.  Banks can then connect and collaborate with retailers, other service providers and developers, for example, to create new business models and revenue opportunities.

To do this effectively, however, banks must work now to centralise and understand the data they already have. Right now, banks have oceans of data but lack insight. The extraordinary potential of artificial intelligence (AI) and machine learning (ML) technologies, however, will allow banks to sail into these unchartered waters. Banks should be working right now to identify partners who can help them harness this analytical power, and indeed many are.

To truly embrace the open banking revolution and seize the opportunities it presents, banks and financial institutions must resist the urge to close ranks. An open and collaborative approach, however, is resource intensive and inherently experimental, and though the costs and risks can be absorbed by the largest banks, it will present challenges for those with more modest resources. Cross-industry collaboration is therefore essential. The ability to discuss best-practice, shared experiences and exchange ideas in a commercially-neutral environment will remain invaluable. As an independent non-profit organisation bringing together banks, technology companies and financial institutions,  Mobey Forum is committed to empowering banks as they work to navigate through the PSD2 deadline and beyond, into the open banking era.

Tags: PSD2
2
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

    Analyst Coverage, Payments Data, and News Delivered Daily

    Sign up for the PaymentsJournal Newsletter to get exclusive insight and data from Mercator Advisory Group analysts and industry professionals.

    Must Reads

    eCommerce On Social Media, social commerce

    The Rise of Social Commerce and Social Payments

    February 3, 2023
    Electroneum AnyTask; ETN Crypto, sales enablement

    Ethical Financial Selling: The Role of Compliance Technology and Sales Enablement

    February 2, 2023
    direct deposit

    Nacha Launches Campaign to Reach Millennials on the Benefits of Direct Deposit

    February 1, 2023
    Equinix Helps UK-Based Payments Provider Enable Faster, More Reliable Payments Processing

    Equinix Helps UK-Based Payments Provider Enable Faster, More Reliable Payments Processing

    January 31, 2023
    credit card tumbling

    How to Detect, and Prevent, Credit Card Tumbling

    January 30, 2023
    Why Businesses Need to Adopt Real-Time Payments as a Competitive Differentiator

    Why Businesses Need to Adopt Real-Time Payments as a Competitive Differentiator

    January 27, 2023
    faster payments

    Faster Payments Are Set to Revolutionize Modern Digital Payments

    January 26, 2023
    How AI can Help Manage Payments Risk in 2023

    How AI can Help Manage Payments Risk in 2023

    January 25, 2023

    • Advertise With Us
    • About Us
    • Terms of Use
    • Privacy Policy
    • Subscribe
    ADVERTISEMENT
    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Videos
    • Industry Opinions
    • News
    • Resources

    © 2022 PaymentsJournal.com

    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Industry Opinions
    • Faster Payments
    • News
    • Jobs
    • Events
    No Result
    View All Result

      Register to download the Equinix report - Dojo Delivers Fast, Reliable and Secure Card Payments to Businesses on Platform Equinix