Waiting until the Eleventh Hour

European banks’ reaction to PSD2

The revised Payments Services Directive (PSD2) goes into effect in Europe in January of 2018, but few banks are ready. By law they will need to make customer data available in a secure manner, and eventually to give third-parties access to their customer’s accounts. But equally important to these compliance efforts are the strategic implications for banks.

How will they organize themselves and operate in a world of “open banking“? We designed our recent survey1 - coming a year after our PSD2 report “Catalyst or Threat” - to better understand how well banks are advancing toward PSD2 compliance and the strategic direction they are choosing. Encouragingly, two out of three banks in this year’s PwC survey say they want to leverage PSD2 to change their strategic positioning. To do so they will need to analyse the emerging payments landscape and identify new revenue opportunities for services, something most have yet to do. Indeed, despite the late hour, in the first half of 2017 38% of banks was still in the early stages of assessing the impact of PSD2. This figure is especially startling given that twothirds of banks anticipate that PSD2 will affect all bank functions with numerous interdependencies with other regulations. The clock is ticking.