Financial institutions face struggle to catch up if not ready with open APIs for PSD2

Thursday 14^th March marks exactly six months until the deadline for banks to comply with PSD2’s Regulatory Technical Standard. This date also marks an earlier deadline for banks, stating they must have their open APIs ready for testing by account information service providers (AISP) and payment initiation service providers (PISP).

Anton Zdziebczok, Head of Product Strategy at CREALOGIX UK, commented:

“By September 2019, hundreds of independent fintechs will expect access to data from any UK banks or building society when given a securely authenticated request from an account holder via their apps.

“These fintechs provide personal finance management, accounting, credit scoring, payment management, and more. What they have in common is allowing individual consumers to request and liberate their data from one or more of their bank accounts, thereby gaining control of their finances in new ways.

“Complying with these account information and payment initiation requests, properly provided via API, is not voluntary – it’s a mandatory regulatory requirement under PSD2. Technical compliance is the baseline for participating in the new era of open banking.

“From today, fintechs will become more active in asking banks and building societies for access to their API testing facilities and documentation, which again they are obliged to provide. If financial institutions fall behind in laying the technical groundwork required by PSD2, they will not be ready to provide the connectivity expected by consumers later this year.

“Consumer awareness and expectations will rise as fintechs announce more connections and collaborations with banks and building societies, and account holders will simply vote with their feet if they find that their current provider does not have the technology to participate in open banking.”