Editor's picks: Developments in PSD2

By Alex Hammond | 16 June 2017

1. How should banks be reacting to PSD2?

Leonie Mercedes, Reporter, bobsguide

With six months to go until the directive comes into force, it is time for banks to start asking themselves some serious questions, says Leonie Mercedes.

The countdown has started. At the time of publication, it’ll be just over six months before banks are required to comply with the Second Payments Services Directive (PSD2). The directive requires that by January 2018, banks must grant third parties access to a treasure trove they’ve been sitting on for decades – their customers’ data, as well as payment infrastructure. The change is a bonanza for fintechs building disruptive apps and services, while from the banks’ perspective, this could be alarming – they’re about to lose their monopoly on customer information. But as bobsguide finds, PSD2 offers incumbents a wealth of opportunities, as long as they’re on board.

2. How PSD2 is replacing the benefits of cards

Jeremy Bliss, Business Development Director, Icon Solutions

The world is now immediate. We’re able to buy things online and have them delivered the same day (sometimes within an hour), our correspondence is sent and reacted to in seconds, and opinions and photos are shared before we can even decide whether it’s a good idea or not. In this instant, digital world, why is making payments still so cumbersome?

PSD2 is about to change all this. PSD2 mandates that customers be offered the option of paying direct from their bank account – which is ideally suited to Instant Payments. For the first time, infrastructure will be in place that enables consumers to move money as quickly and easily as they would send a text message.

3. How PSD2 is changing the face of payments 

Daniela Eder, Cash Management Business Development Manager, BNY Mellon

Technological innovation – driven by the emergence of a tech-hungry generation – has become a huge catalyst for change across the financial services industry. Certainly, the payments space has altered significantly in recent years, with new players including fintechs and challenger banks entering the market, and increasingly sophisticated digital solutions coming to the fore.

It is crucial that regulation works in tandem with the evolving market to ensure it remains fit for purpose and can effectively address the needs of the environment. And in recognition of the degree of change taking place, European legislators are revising and updating the Payment Services Directive (PSD).

4. Token CEO: “PSD2 is the best thing to happen to banking in its history”

Alara Basul, Reporter, bobsguide
In April, Token announced a $18.5m Series A funding from investors including Octopus Ventures, EQT Ventures and OP Financial Group.

Token’s CEO and founder, Steve Kirsch, has lead inventions behind a myriad of ground-breaking technologies which have had billion dollar exits. Steve’s previous inventions include the optical mouse, company Frame Technology Corp, which develops the desktop publishing software currently sold by Adobe, and one of the first Internet search engines Infoseek, which was acquired by Disney.

Steve spoke to bobsguide exclusively about the latest funding round and his strategy behind growing Token. 

5. PSD2: How secure is the future of mobile finance?

Mark Noctor, VP EMEA, Arxan Technologies

The ubiquitous smartphone has impacted almost every aspect of our lives, with apps now available for almost every conceivable daily task. As much as our lives have been changed by this development, however, the impact is felt much more keenly by service providers - and perhaps by none more so than financial services.

Mobile services have rapidly transformed banking, and research from consultancy firm CACI estimated that current account customers in the UK visited their accounts more than 895 million times via mobile apps last year alone, overtaking 705 million visits via computer and dwarfing the 427 million visits to branches.

The trend is only set to accelerate as the leading banks set their sights on mobile services as their main competitive battleground. The latest wave of new challenger banks such as Starling, Monzo and Atom have bet on an app-only approach, doing away with traditional infrastructure entirely.

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