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Banks prepare to tackle open banking/PSD2 challenges

Banks are facing unprecedented changes as some of the requirements of the revised Payments Service Directive (PSD2) take effect this year. With six months to go before the proposed RTS (regulatory technical standards) deadline, a report by Finextra examines attitudes and unforeseen challenges faced by banks as they face the open banking and PSD2 transformation. The report – PSD2: A strategic game-changer with a long-term impact – is based on answers from 89 banks in 14 European countries, and it highlights some of the following findings:

  • fewer than half expect an ROI in their investment within two years;
  • more than half agree that their PSD2 budgets have enabled them to progress more quickly with other related projects and to speed up their digital transformation programmes;
  • 88 per cent will partner to deliver what customers need and almost 60 per cent express preference for a ‘one-stop-shop’ provider;
  • nearly 40 per cent think customers are not ready for open banking;
  • 36 per cent of respondents see tech giants (such as Google, Amazon, Facebook and Apple) as the biggest threat;
  • established banks considered very slightly more of a threat than new digital challengers and in turn new digital challengers considered slightly more of a threat than fintechs;
  • strong endorsement for the fact that PSD2 and GDPR are forcing more focus on security and data privacy.

The report also highlights:

  • UK bank respondents are most confident of being live on time (72 per cent), compared to only half of respondents (50 per cent) from Italy and France, and 49 per cent from Germany;
  • 55 per cent of respondents say they are currently implementing the changes they need to make – while 31 per cent said they are still assessing what they need to do;
  • 9 per cent strongly agree that their customers are ready for open banking: banks see demand, but do not anticipate it being at full strength from the outset of PSD2;
  • 80 per cent of banks face challenges in achieving PSD2 results, including budget constraints, technology challenges, integrating legacy and new systems and security concerns;
  • 93 per cent of respondents said “there is a contradiction between PSD2, which requires banks to share more data, and GDPR, which requires banks to be even more careful about data sharing, and this is increasing the complexity of the compliance landscape for banks”.

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Payments - Bill Collection
SEPA Payment Structure & Services

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