It aims to lower the barriers to entry for payment services providers, reduce costs and increase competition. To do so it will standardise aspects of payments, charging and operations. The Access to the Accounts (XS2A) rule will force banks to enable third parties to initiate payment transactions and provide account information if the account holder wishes to do so. The threat of disintermediation for banks by new entrants is very real. Failure to deliver new service offerings could leave a firm as a ‘payments utility’ that is nearly invisible to customers. Icon is working with firms to develop their competitive strategies and compliance programmes.
To respond to the threat of Third Party Providers (TPPs), banks will need to:
- Retain and attract existing customers – customers that use TPPs for account information or payment initiation can be targeted with marketing aimed to tempt them to use other financial institutions.
- Protect the brand – TPPs may not promote the bank’s brand during the purchase experience. Worse still, deficiencies in TPP offerings may be incorrectly blamed on the bank.
- Drive new revenues – this is an area where product managers will see opportunities to offer new services to drive additional revenue streams.
- Address integration – application programming interfaces will have to be developed to support third party access.
PSD2 – Keep up with us
Icon is working with industry groups to help to shape the strategic response to PSD2, providing insight and best practice. We see how banks could be disintermediated, which strategies could prevent that disintermediation and the effective use of simple technologies to develop new offerings in a highly competitive landscape.
PSD2 will require organisations to enable their digital channels to interact with core banking and payment systems in real time. We have worked with clients to minimise the costs and risks of using web data platforms.
It will enable you to -
- Obtain fast access to the relevant data for a specific customer (potentially beyond regulatory requirements) with the flexibility to support additional “value added” requests without any redevelopment.
- Appear ‘always on’ even when legacy services are not available.
- Reduce operational costs through increased self-service by customers.
- Be confident of meeting the PSD2 regulatory demands when the data content and security requirements are finalised.
- Meet your PSD2 TPP access requirements and enhance customer experience via digital banking.
Fast track to PSD2
Icon has developed the ‘Fast Track to PSD2’ tool to help financial institutions to prepare for the new regulation. It reviews your applications, data architecture,
technology platform and delivery approach to assess their ability to meet compliance requirements and support future digital initiatives. Fast Track to PSD2 will save time, reduce cost and increase certainty.
If you would like to know how our Fast Track to PSD2 can help you, view our whitepaper or Contact Us.