As the third installment of our series about the impact of new payment requirements and how to creating winning propositions for banks, this section reveals how Open Banking and PSD2 will enable exciting new payment services due to increased innovation and heightened competition.
The implementation of these new payment requirements is enhancing security and improving transparency within Digital Banking and throughout the market with a variety of new payment services including:
• Consumer apps to find the best investment or borrowing offers in the market
• Ways to validate and authenticate the payee before a payment is initiated
• New payment instruments to smooth out the timing of bill payments
• Ways to manage cash more efficiently and forecast working capital requirements
• Use of account to account payments as an alternative to using card payments
While the first Open Banking solutions to hit the market are largely intended for consumers, banks and fintechs are increasingly realizing that the small business and corporate sectors represent extremely exciting opportunities to offer new value propositions because of the new Payments Regulations.
Banking and FinTech Collaboration
Although it was widely suggested that the introduction of Open Banking and PSD2 would entail a fintech-dominated payment solutions environment, those concerns evolved into the reality of banks seeking partnerships with well-established fintech providers. By combining the nimble and cutting-edge solutions of fintech providers with the large customer bases and strong revenue streams of banks, payment providers are taking advantage of payments innovation on a white-labelled basis.
With banking being such a highly regulated industry, the process of ensuring mandatory compliance with regulations absorbs a great deal of banks’ budgets. Because of this relatively limited funding for discretionary spending, it is becoming increasingly important for banks to find cost-effective ways to ensure that their offerings are competitive, up-to-date, and compliant. Banks are now benefitting immensely by partnering with trusted advisers with industry expertise and cutting-edge solutions that help banks embrace the age of digital transformation.
To find out how your organization can benefit from new payment services, download the full whitepaper about How Banks Can Create Winning Propositions.
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Follow these links to see other posts in this series about the implications and opportunities presented by new payment regulations:
PSD2 and Open Banking Drive Innovation, Part 1
Open Banking and PSD2: What’s the difference?, Part 2