“PSD2 is a good starting point for European banks to implement open banking strategies,” she says. “But it’s not the full potential that could lie behind the implementation of open APIs.” Be it Australia, the UK, Europe, Singapore, Switzerland or wherever open banking is currently being implemented, the motivations are similar but the drivers can be different. In many cases it’s being accelerated by legislation (as in Europe) or non-mandatory frameworks (as in Singapore). Elsewhere, it’s bubbling up from a dynamic market. The end result is the same, though: more competition between providers, the rise of the specialist service and greater cooperation between incumbents and new entrants equals greater choice for consumers through the rise of the API-facilitated marketplace. The difference between the two approaches (government or market-led) is often only the speed of change.
And speed is of the essence now, according to Dlugosch. “Banks should find a scalable way to bring in three, four, five innovations per year and new complementary products,” he says. “So, banks should create ecosystems where they are the navigator to the financial environment of the client and bring it all together in one frontend.” Zangl, says the effects of PSD2 are being felt across the globe. “It will totally have an impact outside of Europe,” she says. “What we see now is PSD2 swapping over – to Canada, Switzerland, and even South Africa. “In conservative markets, it’s important for banks to have a regulation pushing them to implement these services, but they should not stop there. This is happening in Europe already: banks see that there are a lot of third-party providers (TPPs) out there that want to use their data, and now I think they are understanding the opportunities.” Australia’s Open Banking, or Open Data, regime officially began on July 1 this year, with the country’s four major banks
mandated to give TPPs access to generic product data for credit and debit cards, deposit accounts, and transaction accounts via APIs. Customer data is expected to be included by February 2020. Elsewhere, Asia is widely considered by many to be the world’s most innovative region in terms of payments technology, and Singapore by far the most advanced within it in terms of open banking and APIs, despite there being no regulation in place to promote it. In 2016, the Monetary Authority of Singapore (MAS) published API guidelines to encourage banks to open up their systems in an innovative way, and since then has initiated measures designed to further promote the opening of its financial sector. Banks there are regarded as role models when it comes to applying use cases and providing an intuitive and developer-friendly portals. “But it’s not just opening up your APIs,” stresses Zangl. “It’s also about providing extended data services. “PSD2, for example, only covers a very small part of the potential that lies behind open APIs. It’s really just a first step in the right direction.”
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Issue 13 | TheFintechMagazine
Fintech Finance presents: The Fintech Magazine Issue 13