- Paper suggests that, given the clear benefits to clients, banks should participate in the consultations and act on the early drafts of the European Banking Authority’s Guidelines immediately in order to ensure smooth implementation projects.
Banks and Account Servicing Payment Service Providers (ASPSPs) should not delay deploying PSD2-related changes, stresses a new whitepaper produced by Deutsche Bank in collaboration with payments consultancy PPI AG. This is despite the fact that the majority of member states are yet to transpose PSD2 into national law, and despite a number of Guidelines and Technical Standards, drafted by the European Banking Authority, remaining in consultation.
The paper, “Are you PSD2-Ready?”, outlines a number of challenges for banks tasked with becoming PSD2-compliant, especially with respect to the timeline for implementation. While PSD2’s overall implementation date is 13 January 2018, there remains the very real possibility that transposition into national law in some member states may be delayed beyond then. There is also a problematic implementation gap between the date that PSD2 becomes effective and the point at which two highly important Regulatory Technical Standards relating to third-party interface requirements come into effect. At the earliest, this is likely to come during H1 2019 – more than a year after PSD2’s implementation.
The paper highlights the uncertainty around whether ASPSPs will need to provide third-party providers with a “fall-back” option in the event that their dedicated interface becomes unavailable, endorsing the hotly-contested practice of “screen scraping”.
Despite these challenges, Shahrokh Moinian, Global Head of Cash Products, Cash Management, Deutsche Bank, urges banks to continue progressing their PSD2 projects: “Given the benefits to corporates, there is no reason why ASPSPs shouldn‘t conclude their IT projects and deploy PSD2-related changes – including those outlined in the new Guidelines – as planned, prior to the January start-date. With respect to compliance with their third party interface obligations, we would also advise ASPSPs not to wait until late in 2018 or early 2019 to get going. They will not only miss out on some first-mover opportunities, but they may find themselves wholly underprepared for change.”
The paper also stresses that PSD2 brings as many opportunities as challenges, resulting from the innovative eco-system flourishing around third-party access. As a first step, this will mean value-added services for retail customers, but in time will also likely mean emerging services addressing the needs of corporate customers.
Moinian concludes: “We rest on the cusp of a payments revolution. The financial institutions that will thrive will be those that exploit the power of APIs – initially to provide third-party providers with access to their customers’ accounts as part of PSD2, but more broadly thereafter to create innovative and convenient products and services tailored to users’ changing requirements.”
The full whitepaper can be viewed here.