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Banks or platforms: The digital future

Author(s): Patricia Jackson

Date published: Jul 2017

In Europe regulation is driving open banking with the Revised Payments Services Directive (PSD2) coming into law in 2018 and requiring banks to enable authorised third parties to extract data on a customer’s financial histories or to initiate a payment from the customer’s account. This creates the scope for a jump in financial intermediation to a digital future. Aggregators will be able to tell customers the trends in spending, trends in saving as well as detailed analysis of spending patterns. But it also opens the door to new and much more sophisticated money management services. Combined with artificial intelligence the rich data available on a customer would enable product need to be predicted and exactly the right array of products in terms of price and characteristics to be offered to the customer. The likelihood is that successful operators will be platforms offering products manufactured by a variety of players rather than just offering their own. Whether this future is realised to its full potential depends on the design of the regulatory framework that will accompany PSD2. In particular will an open API framework be mandated or will the water be muddied by allowing access to ‘scrapers’ who access the data not computer programme to computer programme but through ‘impersonating’ the customer, using their passwords etc. This would create issues of lack of standardisation and reduced robustness and security. 

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SUERF Policy Note, Issue No 14SUERF Policy Note, Issue No 14

Banks or platforms: The digital futureWeb version: Banks or platforms: The digital future

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