How will a revised European Commission directive impact banks?


As seen in The Future of Banking 2017, Raconteur.

The revised Payment Services Directive (PSD2) will come into force less than a year from now, but the full impact of the changes that it will bring to banks are still emerging. As banks come to terms with the huge threat the European Commission directive poses to their traditional business models, regulators are still fine-tuning their requirements and fintech startups are identifying opportunities. Meanwhile, brands such as Amazon and Pay-Pal could be preparing to eat the lunch of banks and credit card companies.

The opportunities presented to financial aggregators will be a key factor in shaking up the market, according to Amanda Hulme, Head of Financial Services at Addleshaw Goddard LLP, and a specialist in this field.

“Aggregator firms have been accessing customers’ financial information such as current account transaction information for a while, but until now they’ve faced legal and practical challenges when doing so,” she says.

“However, under PSD2, aggregators will be regulated by the Financial Conduct Authority, and banks won’t be able to prevent them from accessing this information and using it to offer their own services such as loans, savings or debt advice.”

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Amanda Hulme

Amanda Hulme

Partner, Head of Financial Regulation
London

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Fiona Ghosh

Fiona Ghosh

Partner, Commercial
United Kingdom

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