Few banks are ready for the revised EU Payments Services Directive (PSD2), which will come into effect in January 2018, according to a new PwC survey. It found that 38 per cent of banks were still in the early stages of assessing the impact the payments regulation would have, while only 9 per cent were in the implementation stage of the new PSD2 requirements.

PSD2 – which gives a regulatory framework for 'open banking' – means that EU-based banks will need to give authorised third-parties payment providers (TPPs) access to customer’s bank accounts. PwC states that “PSD2 is a testament to the newly unfolding world of open banking where (fin)tech companies, merchants and even telco’s can change the payments landscape completely.”

Banks' monopoly over

The key feature of open banking, underlined by PwC, is that, in January 2018, the “banks’ monopoly over customer account information and payment services will effectively cease”.

The survey, conducted in the first half of 2017, gathered responses from 39 bank executives in 18 European countries, covering most of the world’s leading banks. It also found that almost all banks (94 per cent) were currently working on PSD2 in some way or another and two out of three banks say they want to use PSD2 to change their strategic positioning.

Banks need strategic response to PSD2

Half of those interviewed said their bank aims to develop an open platform that allows partners to integrate their products and services into the bank’s offering, while providing an open platform for generating new products and services based on the bank’s API and data.

PwC's Marco Folcia noted that PSD2 will be a compliance challenge for banks in the run up to implementation. He added: “Banks need a proper strategic response to avoid becoming disintermediated by more customer-oriented third-party offerings. They will need to analyse the emerging payments landscape and identify new revenue opportunities for services, something most have yet to do.”