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Digital Transformation

Open Banking And PSD2 [Trend To Watch]


In an effort to create more competition in the financial services industry, give consumers more control over their data, and enhance consumer protection, new regulations, such as the revised Directive on Payment Services (PSD2), have been adopted in Europe.

Some companies, such as BBVA, were early adopters of technology (e.g., APIs) that opened access to its platform and services (e.g., a customer’s bank account information), enabling third parties to create new and disruptive solutions that revolve around payment initiation services and account information services.

In recent months, more firms have implemented new solutions stemming from PSD2. One example of a company already using the “open banking” concept to its advantage is ING. The company announced that it had launched Yolt, a free mobile app that allows U.K. consumers to manage their money across various banking institutions.

According to the app’s website, Yolt aggregates a user’s bank and credit card accounts and provides a dashboard that:

  • Instantly shows you how much you have left to spend until next month’s payday
  • Predicts your balance based on your monthly salary, spending, and predicted direct debits
  • Combines the transactions from your U.K. bank and credit card accounts into one view
  • Offers snackable and actionable insights about your money

“We built the aggregator in the way that people think about money,” said Ignacio Julia Vilar, chief innovation officer, ING.

Before Yolt is officially launched to the public, it will be tested by 2,500 of the bank’s early adopters.

The app was developed by ING’s Innovation Office in Amsterdam and came to fruition because of U.K. and European regulators’ pressure on financial institutions to provide competing companies with open access to their client data.

Barclays is another example of a firm that is evaluating different ways to leverage PSD2 to provide a better experience for its customers. Through journey mapping, the company figured out that a large portion of customers logged onto its website to simply find information, such as their balances. To make access to this information easier, not to mention help mitigate risk (i.e., IT glitches), Barclays is interested in having Facebook push this information to customers. It’s even possible that one day customers will be able to carry out banking activities through the social network.

As the European Banking Authority develops specific guidelines and technical standards, and as European Union Member States (plus a couple of other countries) transpose PSD2 into national law in early 2018, companies in the U.S. will continue closely monitoring the region’s new regulations and the progress that financial institutions are making to meet them, as it is very likely that the country will follow suit with similar regulations in the coming years.

To read about the 14 other trends that we believe will take place in the financial services industry in 2017, click here or simply fill out the form below to download our newest guide.

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Eugene Sefanov

Director, Industry and Regional Marketing

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