Industry news

41% of banks missed PSD2 deadline says survey

By March 25, 2019 No Comments

Close to half of banks (41%) failed to meet a recent deadline for the Payment Services Directive (PSD2) to provide a testing environment or ‘sandbox’ for any third party service providers (TPPs).

The statistics came from a survey of 442 European banks carried out by Swedish open banking platform Tink. While the majority of banks (59%) did comply with the measure, there was a still a significant minority that failed to do so.

The survey covered 10 markets and while the likes of Germany, Belgium, Finland and Sweden all had compliance rates above 80%, others such as Spain, Denmark, France and Norway were all below 50%, while the Netherlands and the UK had respective compliance rates of 67% and 64%.

The importance of this interim deadline is that it gives the third party providers the opportunity to test the APIs that they would use to connect to banks and to serve as the basis for any payment services offered to consumers under the European Commission’s Open Banking initiative, prior to the major September 14 implementation deadline.

According to Tomas Prochazka, VP of Product at Tink, the survey results show that PSD” is placing a sizeable burden on banks.

“Many will point fingers at those who failed to comply but we need to recognise that banks of all sizes are struggling to deal with short timelines to satisfy a wide range of needs – their own need to be in control of the data; the TPPs need to have access; and the politicians’ need to have a fair market environment within the timeline they’ve laid out,” he said.

Prochazka also highlighted the potential disruption to various open banking platforms and services caused by any banks that miss deadlines. “After all, we’re all required to use the bank’s dedicated interface by the 14th September deadline. And if we can’t get in there and start testing them, it forces us to continue to rely on the fall-back mechanisms that we’ve always used – rather than the open APIs the banks would prefer we use.

“Everyone involved in open banking is heavily invested in realising the future we all envision for the industry. But the knock-on effect of a missed deadline is big – for banks, fintechs and for consumers. The already arduous requirements will be compounded with additional ones designed to penalise. The costs will increase as the timeline stretches out. And it will hinder everyone’s ability to offer better services to consumers. There’s also a risk for missing the big deadline in September – and for this paradigm shift to take much longer and cost much more,” concluded Prochazka.

Source: Finextra website

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