PSD2 is here – so what now?

After the implementation of PSD2, many European banks are asking themselves: What next? Due to the still relatively small number of certified third-party providers, it is quite possible that the implemented PSD2 platform will remain unused. To change this, banks need to be proactive and drive the use of the implemented APIs.

PSD2 is just the beginning

“PSD2 is implemented, now we can sit back and enjoy the benefits of Open Banking.” That’s probably what some banks had in mind. But their work in the area of Open Banking is far from done with the technical implementation of the PSD2 regulations. This is especially true for financial service providers who want to take on a pioneering role in this area and position themselves advantageously with Open Banking. After all, the expressed goal of PSD2 is to create an ecosystem in which banks offer their services and thus enable third-party providers to enter the market. Like many innovations, this development offers opportunities, but it also poses risks: Institutions that fail to adapt sufficiently to the new realities risk losing market share. It is therefore essential, especially for traditional banks, to position themselves skillfully in the topic of open banking and to seek and promote symbiotic cooperation with the new market participants, the third-party providers.

Take an active role

For this reason, banks should take an active role in the further development of the PSD2 ecosystem. Only in this way can a financial institution succeed in acting not simply as a passive service provider but as an innovative provider whose digital services bring effective added value to end customers. The path to this goal could look like this, for example: First, a bank must decide which specific use cases it wants to cover with these services and which target group or market segment (B2B vs. B2C) it is addressing. Then it needs a clear strategy that defines whether the new services will be offered in collaboration with a fintech or as an in-house product. In both cases, it is essential that the bank plays an active role in shaping these new services. Only in this way can it ensure that its offerings remain in line with its own vision and image.

Pooling resources and using synergies

However, the best strategy is of no use if it cannot be implemented profitably. Therefore, it was ubitec’s concern to design the ubix2b open banking platform in such a way that banks can offer their new services as easily as possible without incurring excessive effort and horrendous costs. Accordingly, it was always our goal that the realized APIs are extensible and easily available to additional consumers. Components such as the Consent Management and the detailed log of the API calls made are designed in such a way that they can be used for further services without great effort. In addition, the integration of an API gateway established on the market also enables more advanced functionalities such as rate limiting or additional authentication options in no time at all. Furthermore, ubix2b allows to extend the available APIs via simple configurations. This allows banks to offer existing APIs from the core banking system or the archive to additional consumers with little effort. This also applies to the addition of further clients. These separate the Open Banking platform into different logical parts and allow fine-grained access control for internal and external partners. In concrete terms, it is defined separately for each API who has access to it and how the authentication of these consumers is handled. What sounds very complicated at first is the reason why ubix2b is so easily extensible: This sophisticated access control allows to reuse existing components for different banks and third party providers and thus to save resources without compromising security.