finance
monthly
Personal Finance. Money. Investing.
Contribute
Newsletter
Corporate

PSD2 Compliance Deadline Is Less Than One Month Away

Posted: 20th December 2017 by
Finance Monthly
Share this article

Last week marked one month until the deadline for compliance with Second Payment Services Directive (PSD2). Coming into effect on 13th January 2018, the legislation will enable consumers across Europe to instruct their banks to share their financial data securely with third parties, making it easier to transfer funds, compare products and manage their accounts.

Currently, the levels of individuals looking to switch accounts is relatively low. Figures by the banking authority CMA highlight that 57% of people have held their personal current account for more than 10 years, while 37% have not switched in more than 20 years[1].

However, opening up the front-end of payments initiation and information services has the potential to dramatically shift the competitive landscape. According to research by Accenture, banks are at risk of losing up to 43 percent of retail payment revenues by 2020[2], as the market place opens up to smaller, more sophisticated digital banks that break the industry’s traditional boundaries.

Pini Yakuel, CEO of customer relationship experts Optimove, comments: “The disruption coming with the Open Banking initiative will have a marked impact on customer engagement. Customers will be able to compare the value that each financial services company offers them quickly and easily. Banks will have a real fight on their hands to retain a generation of smartphone-empowered, brand-agnostic consumers.”

“As the financial services industry grapples with the implications of PDS2, one aspect that remains unaddressed is the need for better communications between banks and their customers. Traditional banks will have to respond to this new, more consumer-focused market, and develop successful marketing strategies to make sure they do not lose customers.

“Understanding behaviours, preferences and needs more clearly is key to developing the kind of emotionally intelligent communication with customers that makes them feel comfortable with their bank, helping them to make good financial decisions. Those banks who can offer something back at each stage of their relationship with each customer will set themselves apart under the intense scrutiny of Open Banking.”

“To keep ahead of their competitors, they will need to tailor services to support customers more effectively, offering real value that appeals to each customer personally. Artificial Intelligence which reveals what value looks like to each customer, will provide banks with a clearer understanding of their customer’s preference and affinities. Enabling them to cater to their needs accordingly and provide true value to each of their customers.”

(Source: Optimove)

About Finance Monthly

Universal Media logo
Finance Monthly is a comprehensive website tailored for individuals seeking insights into the world of consumer finance and money management. It offers news, commentary, and in-depth analysis on topics crucial to personal financial management and decision-making. Whether you're interested in budgeting, investing, or understanding market trends, Finance Monthly provides valuable information to help you navigate the financial aspects of everyday life.
© 2024 Finance Monthly - All Rights Reserved.
News Illustration

Get our free monthly FM email

Subscribe to Finance Monthly and Get the Latest Finance News, Opinion and Insight Direct to you every month.
chevron-right-circle linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram