Preparing for PSD2 & Open Banking: Forthcoming regulation and technology pose serious challenges for banks

The EU’s Directive on Payment Services 2 (PSD2) will accelerate the fragmentation of Europe’s retail banking industry following the global financial crisis. The opportunities brought about by PSD2 will energize those banks with strong brand awareness and advanced digital offerings into pushing the boundaries of open banking. Increased competition from card issuers and non-bank third-party providers will prompt the steady mid-cap players to fundamentally evaluate their strategies. Banks that are competing on price may see a future in collaborating with third parties, but in doing so will relinquish control over their customer relationships. Whichever path is chosen, the opportunity to offer, create, or co-create new products and services much more quickly is a positive change for the industry.


Understand the impact of PSD2 on retail banking.

Identify strengths, weaknesses, opportunities, and threats posed by PSD2 and open banking.

Action key tactical steps to ensure compliance with PSD2 regulation.

Envisage how banks can provide value-added products and services in an open banking environment.

Reasons to buy

What is PSD2?

How will it usher in a new buyer-driven payment model & increase competition?

How do banks need to react to changing legislation?

Companies mentioned


Table of Contents




PSD to usher in a new buyer-driven payment model & increase competition

PISPS will bring value-added services to consumers

PISPs could meet consumer needs for money management tools

PISPs will challenge banks’ “front-of-wallet” position

AISPs can boost customer engagement, but also customer acquisition

Consumers still trust banks to look after their money

Becoming an AISP will offer a significant competitive advantage

Consumer concerns over the security of account aggregation must not be ignored

A Strategic Approach to PSD and Beyond

Fintech networks are a key strength

APIs are not simply technical solutions, but also business products

PSD will undermine customer loyalty

Strategic options split into three main models

A Tactical Approach to PSD Compliance and Open Banking

API program consists of several distinct stages

Banks need a plan of action

The first priority is to set up a framework

Create an API strategy

Design an API production process

Market, network, test, and consume

Prepare for delivery service support and optimization monitoring


The market banks compete in is about to change radically and they will need to look positively towards becoming facilitators




Further Reading

Ask the analyst

About MarketLine


List of Tables


List of Figures

Figure 1: Consumers want tools to help them manage their finances

Figure 2: Consumer attitudes towards account aggregation

Figure 3: What PSD2 means for banks: SWOT analysis

Figure 4: API program overview

Figure 5: Tactical steps required for open banking


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