This referenced posted blog is a good question and likely the answer is ‘yes’, but also we need to wait and see how effective. Since PSD2 is a legal imperative, one key question posed by the author is whether or not end user companies (the client buying or using a particular financial services product) wishes to share actual bank or account data with the 3rd party vendors for which API-based sharing was designed to assist.
‘When it comes to new services around B2B and working capital, I believe like any good market hypotheses to test, we need to understand a basic question when it comes to corporates – will they provide third party vendors this access? I don’t know the answer to that question, but I do know it comes down to trust and value proposition. Certainly making sure vendors have the security around your bank data will be important in this age of constant hacking threats’.
Generally speaking, banks are highly trusted institutions, and even though certain services from banks have occasionally seen outages during the past several years, there have been few reported data breaches, as opposed to numerous data loss events at service providers on the periphery of banks. Certainly API-managed data sharing has a better level of security than the common screen scraping activities still in place, but the question still holds.
In another article that we summarized recently, there is also the possible impact of IFISA, which is a tax incentive for investing in peer-to-peer lending systems and may represent a boon to the space. So indeed, will be ‘interesting to see’ how it all develops, as the author states.
Overview by Steve Murphy, Director, Credit Advisory Service at Mercator Advisory Group
Read the quoted story here