When will we see the indirect impact of PSD2?

The FinTech-famous date 13th January 2018 is finally approaching and less than one week ago. What has felt like ages – probably because it did – is now about to change our lives: PSD2. Banks are obliged to open up their infrastructure to Third Party Providers (TPP), and these TPPs have to finally meet certain criteria in order to access current accounts.

Even though PSD2 is only one week away it will take another few years to see the actual impact of PSD2. The date of 13th January is only important to banks, TPPs and other stakeholders but not the customer. John Doe will bank the same way on 13th January as he did on the days before and will probably not even know what PSD2 stands for or the impact will be for him.

The direct impact of PSD2 will be much more visible for people like John Doe when the technical framework of PSD2 has to be implemented by banks. This will happen – of course not on 13th January 2018 – but in late 2019 (fingers crossed!). Access to current accounts will then be the new normal and TPPs can use this access to build new services on top of this data.

But what I am wondering about is when the indirect impact of PSD2 will be visible? As I have written before already, PSD2 is “only” a regulatory and will speed up a trend in the financial service industry that would have happen anyway. There are clearly banks that will wait until the very last minute (or even later than that) until they provide TPPs with access to their treasure chest (aka data of their customers). However, we do see the trend that banks are trying to use Open Banking as an opportunity and are currently working on everything around “platform” and “APIfication”. These players that do not stop on the last page of the PSD2 text but want to go further than that might have an even bigger impact on the industry than PSD2 itself.

The pure readout of transaction from our current accounts was technically already possible before PSD2. Making this easier will definitely attract more developers and especially industry outsiders. But if a bank takes APIs seriously, it should not stop at providing bank account transactions. That should be just the first step. There are probably many other services a traditional bank could “APIze”. That would be the indirect impact of PSD2 and something that really changes the way John Doe is banking…