The European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) published two complementary assessments of the regulatory coverage of crypto-assets under existing EU legislation and also set out their advice to the European Commission on potential policy initiatives in the future.Read More
On 13 January 2018 the second Payment Services Directive (PSD2) became law across the European Union, leading to Open Banking. For background information, please see EU oversight on payments and Open Banking.
Mastercard announced on 5 June that it is launching a suite of services to help banks and FinTech companies navigate the Open Banking environment. The programme seeks to address the liability issues of banks sharing their data with third parties and to help startups to better communicate with their banking partners. For banks, Mastercard is building a pan-European directory of verified and legitimate third party providers, backed by a fraud monitoring service and dispute resolution mechanism. Startups in turn will be provided with a ‘connectivity hub’ that will help third parties establish and maintain communication with banks.
The new services will be launched first during a pilot phase in early 2019, with the UK and Poland being a particular priority, before being rolled out across Europe later that year.
By Jim Bulling and Edwin Tan
The Australian Government has today released a report into Open Banking in Australia that sets out recommendations in relation to the method of implementation and proposed timelines. Some key points are:
- the Australian Competition and Consumer Commission (ACCC) should be primarily responsible for overseeing standards-setting and accreditation, assisted by the Office of the Australian Information Commissioner for privacy issues;
- the obligation to share data should apply to all Australian Deposit-taking Institutions (ADIs) as well as reciprocally for other participating entities;
- all ADIs should be automatically accredited to receive data. A risk-based accreditation standard should be used for non-ADIs (this would include most FinTech startups, for example);
- the use of Application Programming Interfaces to facilitate data sharing; and
- mandatory implementation of “read-only” access should be approximately 12 months from a final Government decision to implement Open Banking for the big 4 banks, with a further 12 months transitory period for other banks.
By Judith Rinearson and Rizwan Qayyum
On July 27 2017, the European Banking Authority (EBA) published the Final Guidelines (the Guidelines) on major incident reporting under the revised Payment Services Directive (PSD2). The Guidelines were developed in conjunction with the European Central Bank (ECB), and are addressed to all payment services providers and competent authorities within the 28 European Union Member States. With the expected implementation of PSD2 in January 2018, the Guidelines further contribute to the objective of the PSD2 aiming to minimize disruption to its users, payment service providers and the systems.
Traditional banking is a thing of the past, at least according to 203 senior retail banking executives surveyed by the Economist Intelligence Unit.
According to an Economist Intelligence Unit report for Temenos, the EU’s Second Payment Services Directive (PSD2), which will force banks to provide interfaces, APIs and data to third parties, is set to “tip the scales between banks and FinTechs for customer loyalty.” More than half of financial transactions will be made through FinTech companies rather than traditional retail banks by 2020, as the latest EU payments directive unleashes competition.
By Jacob Ghanty
The second EU Payment Services Directive is set to change the banking landscape in Europe. In the linked article, Jacob Ghanty describes some of the changes that PSD2 will bring about. This article was first published in inCOMPLIANCE, member publication of the International Compliance Association www.int-comp.org.