PSD2: Getting Started With EEI
by EEI1 Team1
PSD2: Getting Started With EEI
As one of the first FinTech companies on Wall Street, it is safe to say that EEI is the Financial Industry’s data expert. We want to pass this knowledge onto our clients, colleagues and friends by discussing a revolutionary initiative we have been working hard to help our clients prepare for - the European Union’s Revised Payment Services Directive (PSD2).
The information on PSD2 can be overwhelming and confusing to both the average person and tech genius alike. This post aims to simplify the mandated requirements within PSD2 and provide insight on how Financial Institutions can embrace and respond to this initiative. Most importantly, it aims to raise excitement as this regulation will change the banking landscape forever, in favor of you - the bank’s customer.
The European authorities have largely decided that people, not companies, own the digital records associated with their accounts, mandating European banks to make it easy for customers to share their financial data and manage their finances with all Third-Party Providers (FinTechs and Merchants). FinTechs are eager to capitalize on PSD2 as it will standardize data sharing and enable new, non-bank entrants to offer banking services. Merchants also see PSD2 as a huge opportunity now that online payment options will include the ability to pay directly from the user’s bank account, instead of their debit or credit card. This will cut out the middle man – reducing fees and complexity and providing an enhanced digital experience. More importantly, PSD2 will give the average consumer the power to choose - one of the main objectives of this mandate.
PSD2 has the biggest impact on Financial Institutions, who must comply with all PSD2 requirements by January 2018. With the deadline fast approaching, commentators predict that a majority of the Financial Institutions in the UK will not meet the target date. Security and strong customer authentication and access to accounts are the main building blocks of PSD2. To be successful, Financial Institutions need experts and developers, an open Application Program Interface (API) strategy, strong tools for customer authentication and the ability to maintain the platform. In the beginning, most Financial Institutions were entering this blind, especially those with headquarters outside of Europe. Deploying a new infrastructure on (mostly) legacy platforms and implementing procedures to maintain it are costly and multifaceted.
The necessity to meet these requirements and security measures, allows an opportunity for Financial Institutions to either haphazardly build their own platform, or invest in a proven and reputable solution from an industry-leading software company, such as EEI. If an effective solution is implemented, Financial Institutions will not only comply with PSD2, but deliver wider and more competitive offerings:
- Increase customer retention by providing customers with transparency and control of their data
- Facilitate a new revenue stream by offering new products and monetizing additional APIs
- Expand and enrich service offerings to their customers by collaborating with FinTechs to provide meaningful engagement
For banking customers (i.e. you), PSD2 is a revolutionary model for the future of Financial Services worldwide, shaped by the advent of consumer digitalization. It is a response to the mounting pressure for Financial Institutions to provide efficient and secure data access methods for their account holders. PSD2 will provide the average consumer with fee protection and transparency, secure payment methods, the ability to choose who manages their financial data and an overall improved, seamless, customer-centric approach to everyday banking. With the customer being one of the key drivers behind this mandate, it is paramount that banks do more than just comply with PSD2 - they embrace it.
The objective of PSD2 goes deeper than data sharing. It’s the leveling of the playing field that will allow for the creation of new, innovative business models that combine the best features of Financial Institutions and FinTechs to provide unparalleled customer experience from start to finish. The whole world will be watching as the European member states roll out this groundbreaking directive.
Let EEI help you get started today...
Financial Institutions will need to partner with a technology company that can properly position them in the new Financial Services API economy. EEI’s deep data and industry knowledge and enterprise-wide technology has enabled us to build a solution that is the first to fully support all industry standards including PSD2, FS-ISAC, OFX 2.2 and DDA. At EEI, we understand that we are all part of the Financial Services ecosystem. Innovation, strong security and joint development between Financial Institutions and FinTechs will provide the best customer journey. Let EEI help you get started today.
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About Enterprise Engineering, Inc. (EEI)
EEI has been a trusted advisor to the Financial Services industry since 1995. We work with Financial Institutions (FI’s) and developers to securely and reliably connect people to their money through any-and-all delivery channels. Our software products facilitate data access, aggregation and transaction processing and, are used by many of the world’s largest FI's. EEI has garnered many awards since inception. Most recently, we received Data Aggregation - Firm of the Year – USA, Finance Monthly - Fintech Awards Edition, 2017; CEO Award, Finance Monthly, 2017; 20 Most Promising Financial Services Technology Solution Providers, CIO Review, 2017; 50 Fastest Growing Companies Of The Year, The Silicon Review, 2017; Top 10 Finance Technology Solution Providers, CFO Tech Review, 2017; and Finance Monthly Game Changer Award, Finance Monthly, 2017. For more information, please visit www.joineei.com.
About Revised Payment Services Directive (PSD2)
The Revised Payment Services Directive seeks to improve the existing EU rules for electronic payments. It provides the legal foundation for the further development of a better integrated internal market for electronic payments within the EU. It also puts in place comprehensive rules for payment services, with the goal of making international payments (within the EU) as easy, efficient and secure as payments within a single country. Finally, the directive sets out rules concerning strict security requirements, transparency of conditions and information requirements for payment services, and rights and obligations of users and provides of payment services.