Dear bankers, don't worry about PSD2!
This week I was part of a panel during the Money20/20 Europe roadshow in Frankfurt. The topic of the panel was PSD2 and all panelist had – more or less – the same opinion. And this is quite typical for PSD2 focused panels. However, traditional bankers might have ‘slightly’ different opinions, therefore, I have put the main message from our panel discussion into an open letter addressed to traditional bankers. Maybe it helps to separate the Open Banking discussion from PSD2.
don’t worry about PSD2!
The upcoming weeks and months are going to be crucial for PSD2 and it’s impact on the financial service industry. This three letter acronym is probably the cause for many nightmare of bankers. If you are one of them, let me tell you one thing: You don’t have to be afraid of PSD2 one bit.
Ok, this will not be true if you are working in the legal/compliance department of a bank. However, if you work in any other area of a bank there is no reason to have nightmares about PSD2. Sounds like a relief? It’s not. It’s the opposite.
PSD2 is something every bank will comply with – somehow, sometime. It’s ‘just’ a regulatory requirement. What should be freighting you is the bigger picture: the power that has turned other industries upside down is entering the banking industry. Our world is getting more connected, all of us have new ways of obtaining information and your customers have much higher requirements than in the past. And the traditional banking work culture and mindset does not fit into this world. That should worry you.
So does that mean we don’t need PSD2? Of course we do. PSD2 is accelerating the trend in this industry massively – without PSD2 we would reach the same destination but just much slower. Because customer expectation do not live within regulatory borders. In other words, PSD2 is pushing you to make decisions sooner that you would otherwise delay. Embrace it! The more innovative players in the industry cannot outpace you that much as the regulatory forces you to head together in the same direction. You should be grateful about that, as it might help you to prevent the “death of a thousand cuts“.
So we are requesting everyone who is involved in Open Banking or similar projects: don’t wait for all the final decisions regarding PSD2. They won’t matter for you – the expectations are set by your customers and now it’s your turn to figure out how you can and should address them. Open Banking won’t stop with the implementation of PSD2 – all of this is driven by customer needs and not by the regulators.
PS: Please don’t try to fight for lighter implementations of PSD2. You are just delaying your own decisions. Protective thinking never works in long-term.
And here some additional reading material about Open Banking that has caught my eyes this week (!):
N26’s approach to Open Banking
Lars Markull Newsletter
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