Europe has completed the implementation of the PSD2 directive promoting the idea of open banking
PSD2 and open banking in the EU: first results and lessons.
PSD2 is a directive that promotes the idea of open banking. The implementation of its latest regulations was completed on September 14, 2019 in the EU countries. The main goal of the new regulation is to simplify access to financial services and increase competition among players in the financial services market.
At the Mastercard Open Talks conference, which took place on November 26 in Kiev, experts working in the European market shared their experience and first results after the PSD2 directive came into force.
Thus, according to Kristaps Sikora, Senior Regulatory Advisor at Mastercard, the introduction of PSD2 in the EU has revolutionized regulation. The transition to new standards is intended to increase competition (regulators expect more players and lower prices in the market), promote the emergence of new technologies and improve customer experience. According to the expert, more than 10 thousand public APIs have been registered since the PSD2 directive came into force.
Kristaps Sikora, Senior Regulatory Advisor at Mastercard, at the Mastercard Open Talks conference. Photo: PSM7.COM
In terms of improving the customer experience, Mr. Sikora noted the following:
He also gave 7 key tips on how to prepare for open banking:
Malgorzata Domagala, Client Relations Director at Mastercard (Poland) at Mastercard Open Talks on November 26, 2019.
As a reminder, so far the PSD2 directive does not affect the activities of the payment market. However, the National Bank is already planning stages of changing the payment legislation. According to them, next year the Law of "On Payment Services" may be adopted, and by 2022 open banking standards may be introduced.
PSD2 and open banking in the EU: first results and lessons.
PSD2 is a directive that promotes the idea of open banking. The implementation of its latest regulations was completed on September 14, 2019 in the EU countries. The main goal of the new regulation is to simplify access to financial services and increase competition among players in the financial services market.
At the Mastercard Open Talks conference, which took place on November 26 in Kiev, experts working in the European market shared their experience and first results after the PSD2 directive came into force.
Thus, according to Kristaps Sikora, Senior Regulatory Advisor at Mastercard, the introduction of PSD2 in the EU has revolutionized regulation. The transition to new standards is intended to increase competition (regulators expect more players and lower prices in the market), promote the emergence of new technologies and improve customer experience. According to the expert, more than 10 thousand public APIs have been registered since the PSD2 directive came into force.
Kristaps Sikora, Senior Regulatory Advisor at Mastercard, at the Mastercard Open Talks conference. Photo: PSM7.COM
In terms of improving the customer experience, Mr. Sikora noted the following:
- customer experience is key. It is important for the client to be able to perform all operations in digital form;
- more consumers are using digital and online channels, which is changing the traditional way of providing banking and e-commerce services;
- consumers are using alternative payment methods across different channels.
- Fintech personal finance companies have been able to gain market share in markets where banks have not paid enough attention to customer service and mobile banking.
- With the advent of fintech, some banks have deliberately taken on the role of producers, providing their own banking solutions to fintech companies.
- Some of the leading banks have decided to become aggregators themselves in order to have a complete understanding of the customer and to be able to cross-sell products and services. Such a strategy can only be successful if the prices of these products and services are competitive.
- The most innovative banks often choose to open their ecosystems by partnering with experts to deliver better value propositions, often beyond financial products.
- Payment initiation using ACH remains a niche product as it is difficult for new solutions to gain support in terms of accepting such payments from merchants. But this is a rather promising direction.
He also gave 7 key tips on how to prepare for open banking:
- Open banking is a global trend. Learn from others.
- Consider open banking as part of an overall strategy, not separately.
- Think in terms of an open ecosystem.
- The most important thing is the customer experience.
- The lines between banking and other activities are rapidly blurring.
- The mobile app is the main asset for attracting customers.
- Pricing and analytics skills are becoming more important.
Malgorzata Domagala, Client Relations Director at Mastercard (Poland) at Mastercard Open Talks on November 26, 2019.
As a reminder, so far the PSD2 directive does not affect the activities of the payment market. However, the National Bank is already planning stages of changing the payment legislation. According to them, next year the Law of "On Payment Services" may be adopted, and by 2022 open banking standards may be introduced.
