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Expert opinion

Open access as an element in the collaborative spectrum for innovation

Thursday 14 September 2017 | 11:17 AM CET

As the PSD2 only provides a generic framework for this open access, there are still a lot of questions on the table with respect to the access of the account. Read what experts have to say:

Ir. Simon L. Lelieveldt, Regulatory consultant in payments: 

The second Payments Service Directive (PSD2), which will enter into force as of January 2018, stipulates in articles 66 and 67 that Account Servicing Payment Service Providers (ASPSP) need to ensure that their customers are able to use the services of a new group of third-party payment service providers.

These providers are either payment initiation service providers (PISPs), which initiate a payment of the customers or Account Information Service Providers (AISPs), which collect customer account information to the benefit of their users.

The regulatory requirements for this open access are quite new to the banking industry, but we should note that in industries such as telecom the concept of allowing access is already being implemented. Generally speaking we can observe that the PSD2 accelerates the move towards open banking and a ‘platformification’ of banks. The net result is that banks no longer fully dictate the interface and product proposition towards their customers: PISPs and AISPs may all step in to offer service solutions which may provide added value to the customer.

Ralf Ohlhausen, PPRO’s Business Development Director, speaking on behalf of “The Future of European Fintech” Alliance, which they co-founded talks about The PSD2 RTS and Open Banking in the EU:

Until recently, banks were closed ecosystems. Even when the customer wanted to share information with third-party providers, the process was often slow and cumbersome. This limited both the choice available to consumers and the scope for innovation in financial markets.

Open Banking is aimed to change this. In theory, the consumer has complete autonomy and control over their own financial data. With access to this data, third-party providers can offer a range of innovative services that give consumers more choice and better value.

In its original form, the draft PSD2 Regulatory Technical Standards (RTS) threatened to undermine Open Banking in the EU. Fortunately, the European Commission made some essential changes. However, these do not go far enough and the EBA is now pushing back, even behind their previous position.

Gijs Boudewijn is Deputy General Manager at the Dutch Payments Association:  

One of the main objectives of PSD2 is to better protect consumers. Yet consumer protection has not received theattention it deserves in the recent discussions around the final draft RTS of the European Banking Authority on Strong Customer Authentication and Secure Communication that were published on 22 February 2017. Indeed, the changes the European Commission has proposed to the EBA final draft on May 24 do not contribute to better consumer protection. The Commission wants to introduce a so-called “fallback” option to ensure a smooth transition to allow (commercial) business continuity for existing players, whereas in their view the EBA opts for a radical change by outlawing the current practice of screen scraping.

Frédéric Mazurier is CEO of Market Pay, payment institution of Carrefour Group:

As many other new entrants in the industry, we believe that the banking landscape will change fundamentally in the future and that the market will become increasingly diverse and modularized, with new companies specializing to offer very specific components of banking services or products. The retailers will have a role to play in this new environment.

The advent of Open Banking is particularly influential in this respect. Supported by a new regulatory regime, this initiative means that banks will be required to share more customer information than ever before via technologies such as APIs, Application Programming Interface. Making infrastructure available through standardized interfaces will be a catalyst for new competition, from many different sources. But Open Banking and APIs have no value in themselves. These are quasi amenities made compulsory by the regulations and by technological innovation. The challenge is not the technical connection, but the ability to imagine and market on a large scale new and useful marketing services for customers.

Read the entire stories in the Open Banking and APIs – a new era of innovation in banking. Our recent report that gives insight into the nascent landscape of Open Banking in Europe.