Writing for Global Finance & Banking Review, BNY Mellon’s Carl Slabicki, Director, Immediate Payments, Treasury Services, takes a candid look at the arrival of open banking, and what it could mean for the banking industry.
As part of PSD2, financial institutions are now required to share client data with third party payment providers such as fintechs – thus breaking the historical monopoly that banks have held over this client data, and potentially altering the core banking experience as we know it. This data is a valuable business asset, says Slabicki, as it can pave the way for new services from non-bank providers such as loan and mortgage comparison platforms and financial advisory portals.
Although these innovations could enhance the client experience and stimulate healthy competition, the now-accessible data certainly faces significantly heightened security risk. As such, it is vital that the regulatory environment is fluid – able to adapt to requirements accordingly – and that banks focus on supporting these efforts to ensure a smooth transition into the era of open banking.
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