As if Banks do not have enough challenges of other companies vying for their business or competitive service companies challenging their business models. With the PSD2 regulations this may allow Fintechs the opportunity to pick and choose areas of business that are more profitable, or able to offer better valued solutions that create a competitive and sometimes a disruptive approach to parts of financial service areas. The new challenge with PSD2, is that the requirements require that Banks to open up their client data to competitors, whether other banks or any company that can legitimately access the data. This means that Banks will have to work harder at retaining business as within the confines of customers allowing their data to be shared, it will mean that in theory anyone can open a Bank, or a banking service. The opposing and somewhat challenging aspect to PSD2 is that this means data will be leaving the bank. GDPR will require that the Bank knows who is allowed to access the data, the customer ultimately has control of it and must give permission for them to share their data outside of the Bank. Once the other Bank or company has that data they also will have to abide by the same GDPR rules. PSD2 means that Banks who are not used to sharing this data have to set up a different approach to their data management. Some Banks like BBVA (seen by many as a leader in innovation) in Spain saw the value before the regulation came out and see them selves as a technology company and not a bank. Hence have moved ahead to maximise their benefits from proactively opening up their services through API's. Due to various aspects of the regulations that are not that clear it is broadly accepted that the deadline in effectively Q3 2017.
The Revised Payment Service Directive, or PSD2 as it more commonly called, is set to come into force at the beginning of next year, and “gamechanger” barely begins to describe the effect this new set of regulations governing the use of banking data will PSD2 will oblige banks to give third party providers access to their customer’s accounts using Application Programming Interfaces, or APIs. Using simple call and response technology, any firm will be able to compete tooth and nail with major banks across the same suite of services – but in the main, two new types of agent will be created. Firstly, AISPs – Account Information Service Providers. These types of agents are service providers who have access to banks customers’ account information.