Today marks two years since the PSD2 and strong customer authentication requirement (SCA) came into full force. But with recent research finding almost half (48%) of consumers have some level of confusion about Open Banking and its uses, and 10% of business leaders failing to understand how it could help their business, what’s next for this new frontier in finance?
Paul Fermor, UK Solutions Director at Software AG: “After a lukewarm start, Open Banking arguably hasn’t fully delivered on the hype and expectations expressed in the run-up to its original rollout. But what it has done is enable the creation of new fintech applications and a wider opportunity for banks to grow their partner ecosystems. The biggest winners, though, have been the end customers, who are now able to better manage their finances.
“Whilst the banks’ provision of access to customer data has given fintech companies the opportunity to access APIs, it has also created a stimulus for the banks. Necessity is the mother of invention. Much in the same way the Covid pandemic has accelerated digital transformation across industries, PSD2 has created the catalyst for banks to embrace it.
“With the looming threat from Big Tech encroaching into the financial services sector, banks have begun to adopt Open Banking as a mechanism to build and develop their partner ecosystem rather than take a defensive approach.
“In terms of what’s next, a maturing of the ecosystem both in terms of technical interfaces and the applications that use them is essential. The uptake of these new services will improve as retail consumers become more comfortable and habituated to the services they can access by sharing their personal account data.
“Those who are keen to improve customer experiences while creating more cost-efficient and agile applications will be adopting Open APIs and implementing initiatives to digitally transform.”