Three Norwegian banks are looking to get ahead in the race for PSD2 compliance by cooperating on an account aggregation programme.
The EU directive forces banks to share their customer data with third parties. The regulatory framework puts pressure on traditional business models, and competition from new players, which could lead to loss of bank revenue.
With the legislation looming, Sbanken, Sparebanken Vest, and Sparebanken Sogn og Fjordane are enabling mutual customers to view their accounts across the banks from within their own online banking platform.
“There will undoubtedly be increased competition, but it is important to keep in mind that PSD2 does not give other players benefits banks do not get – only access they have not had before,” said Christoffer Hernæs, chief digital officer in Sbanken.
“It is also important to keep in mind that the banks have advantages, which FinTech companies do not necessarily have: trust, experience and insight into the market. For our part, we welcome the competition,” he added.
The new initiative is set to be rolled ahead of the mandated introduction of the revised Payment Services Directive in autumn next year. Through the agreement, the banks are aiming get a head start in the account aggregation space, ahead of the FinTech firms and other players.
The banks said in a joint statement, “The real threat to banks in the future will come from Google, Facebook, Alipay and completely different players than those we are used to competing with. By opening up early, Norwegian banks will be so strong when the directive comes into force in the autumn of 2019. If Norwegian banking customers are already used to seeing their customer relationships across banks, the entry barrier for foreign players will be significantly higher.”
PSD2 will facilitate increased competition for payment services, promote innovation and improve integration between payers. The battle will be about the best and most customer-friendly solutions.
Soon, it will be possible for Norwegians to choose online banking or mobile banking based on the quality of the solutions, not just customer relationships.
The project partners are also in the process of drawing up co-operation agreements that will be extended to other banks who wish to join.
Hernæs added: “We are already in dialogue with more banks about this, and encourage the rest of the industry to embrace the same mindset. We are open to sharing our data with anyone who wants to take part.”
Copyright © 2018 RegTech Analyst
Copyright © 2018 RegTech Analyst
