# Going Dutch – can banks get a fair share in the age of open banking?
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2018-06-15
Category: BANKING
Category URL: https://financedigest.com/category/banking
Meta Title: Nigel Reavley Insights: Open Banking's Impact on
Meta Description: Discover the latest trends in Open Banking, PSD2, Fintech collaborations, real-time payments, and more from Europe's financial services industry at Money
URL: https://financedigest.com/going-dutch-can-banks-get-a-fair-share-in-the-age-of-open-bankinghtml

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_**Nigel Reavley**, Head of Financial Services_

Open banking. In the last year or so, this concept has given Europe’s financial world a lot to grapple with. The implementation of some pretty historic legislation (did someone say PSD2?), and the entry of a number of agile new players, have seen [banking and FS in Europe](https://www.financedigest.com/europes-banks-brace-for-russia-fallout-while-u-s-banks-see-limited-pain.html "Europe’s banks brace for Russia fallout while U.S. banks see limited pain") turn a corner into a new, customer-centric age.

**Key takeaways from Amsterdam’s Money 20/20 Europe.**

> Money 20/20 Europe’s annual Fintech event, which took place last week in the picturesque city of Amsterdam, took the pulse of this [brave new world](https://www.financedigest.com/how-partnerships-between-fintech-start-ups-and-traditional-banks-herald-a-brave-new-world-of-opportunity.html "How partnerships between FinTech start-ups and traditional banks herald a brave new world of opportunity"). As PSD2 is now a reality, conversations notably evolved at this year’s event, with many talking about how banks can avoid [falling behind](https://www.financedigest.com/behind-ftxs-fall-battling-billionaires-and-a-failed-bid-to-save-crypto.html "Behind FTX’s fall, battling billionaires and a failed bid to save crypto").

Compliance may be mandatory, but monetizing investment in new [services and delivering better solutions](https://www.financedigest.com/becoming-more-than-a-bank-adding-value-through-financial-solutions-as-a-service.html "Becoming more than a bank: adding value through financial solutions as-a-service") to consumers is key. So, what are the considerations [banks need](https://www.financedigest.com/change-is-inevitable-how-banks-need-to-adapt-to-customers-new-banking-habits.html "Change is inevitable – how banks need to adapt to customers’ new banking habits") to manage to avoid tripping up?

**Fintechs – Friend or Foe?**

At its core, the revised Payments Services Directive, or PSD2, is [Europe’s regulatory response to encourage fintechs offering new services](https://www.financedigest.com/credit-agricole-and-caceis-to-buy-rbc-investor-services-europe-unit.html "Credit Agricole and CACEIS to buy RBC Investor Services’ Europe unit"), insights and analysis into our banking and transactional lives. [Innovative new services](https://www.financedigest.com/accelerating-financial-services-innovation-with-the-promise-of-data-mesh.html "Accelerating financial services innovation with the promise of data mesh ") are rife – from helpful financial management apps to stress-free P2P payments – and so are the new players and business models that come with them.

This wave of newer, slicker [services is bringing huge consumer](https://www.financedigest.com/keeping-up-with-heightened-consumer-expectations-in-financial-services.html "Keeping up with heightened consumer expectations in financial services") benefits. For [banks to keep](https://www.financedigest.com/bank-of-england-calls-for-wage-restraint-to-keep-grip-on-inflation.html "Bank of England calls for wage restraint to keep grip on inflation") up, innovation is crucial. But this doesn’t necessarily need to all come from in-house investment.

With a number of small, agile fintechs pushing boundaries and proposing new services at the event, [banks can see this as an opportunity for collaboration](https://www.financedigest.com/why-open-banking-heralds-a-new-era-of-ecommerce-merchant-and-bank-collaboration.html "Why Open Banking Heralds a New Era of eCommerce Merchant and Bank Collaboration"), or even acquisition, to boost its own offering. We saw this trend in [presentations on day](https://www.financedigest.com/the-medical-tourism-market-is-estimated-to-substantiate-i-e-grow-at-a-handsome-rate-in-upcoming-years-the-present-day-scenario-implies-the-adoption-of-smarter-ways-to-do-business-as-such-digital.html "The Medical Tourism Market to get filtered through organic digitized growth") one from both ING and HSBC.

A bit of clever thinking is also imperative. While PSD2 [requires opening up access to some account](https://www.financedigest.com/whats-required-of-accounting-to-build-a-better-tomorrow.html "What’s required of Accounting to build a better tomorrow") data, banks still retain masses of valuable data that can be analyzed, repackaged and monetized to offset compliance investments. [Security and compliance with GDPR is also a key constraint on opening up data](https://www.financedigest.com/cyber-security-data-re-assurance.html "Cyber Security: Data ‘Re’-Assurance").

**The race to real-time**

The question of ‘real-time’ [payments was a key talking](https://www.financedigest.com/sabadell-in-talks-with-worldline-nexi-and-fiserv-for-payments-deal-sources.html "Sabadell in talks with Worldline, Nexi and Fiserv for payments deal -sources") point both on the keynote stage with Visa and Worldpay, and on the event floor. The world of physical transactions is increasingly being replaced by online, [in-app and mobile payments](https://www.financedigest.com/exclusive-apple-hit-with-antitrust-case-in-india-over-in-app-payments-issues.html "Exclusive-Apple hit with antitrust case in India over in-app payments issues"). With the point of interaction becoming increasingly virtual, even transparent (see [AmazonGo](https://www.theguardian.com/business/2018/jan/21/amazons-first-automated-store-opens-to-public-on-monday) as one example), banks face the prospect of being squeezed out by the big techs and retailers.

In an increasingly frictionless world, transaction speeds need to [keep pace](https://www.financedigest.com/winning-the-security-race-how-financial-services-can-keep-pace-with-cybercriminals.html "Winning the security race: how financial services can keep pace with cybercriminals"). European [regulations demand](https://www.financedigest.com/strict-regulations-regarding-hygiene-at-industrial-workplaces-to-create-high-demand-for-industrial-dispensers-persistence-market-research.html "Strict Regulations Regarding Hygiene at Industrial Workplaces to Create High Demand for Industrial Dispensers: Persistence Market Research") sub-ten second transaction settlement times, so transactions now are commonly clearing and settling in just two seconds!

[System automation](https://www.financedigest.com/test-automation-systems-for-powertrain-dynamometer-market-to-reach-worth-of-us-1-20-bn-by-2031-tmr-insights.html "Test Automation Systems for Powertrain Dynamometer Market to reach worth of US$ 1.20 Bn by 2031, TMR Insights") is central to banks meeting these demands, but so is a tougher monitoring system. With a reduced transaction processing window, [bank’s need new ways to detect and thwart fraud](https://www.financedigest.com/finance-brokers-bank-on-red-flag-alert-to-help-beat-fraud.html "FINANCE BROKERS BANK ON RED FLAG ALERT TO HELP BEAT FRAUD") quicker than ever before and AI and tokenization were among the many topics discussed.

**[Balancing compliance](https://www.financedigest.com/fintech-and-compliance-managing-the-eternal-balancing-act.html "Fintech and compliance: Managing the eternal balancing act") and innovation**

What [became evident from the regulation stream at the event was that business](https://www.financedigest.com/how-china-became-big-business-for-twitter-from-blocking-to-blue-checks.html "How China became big business for Twitter, from blocking to blue checks") and strategic challenges need to be tackled in tandem with the technical ones.

With PSD2 now in place, solutions need to be open and compliant, but equally well-managed to [protect the data](https://www.financedigest.com/how-financial-organisations-can-stay-protected-from-financial-data-breaches.html "How Financial Organisations can Stay Protected from Financial Data Breaches ") and monetize. In-depth knowledge from [industry experts can ensure a strong testing](https://www.financedigest.com/german-heat-pump-bonanza-test-industrys-resilience-in-russian-gas-crunch.html "German heat pump bonanza test industry’s resilience in Russian gas crunch") framework is in place from the start and quality is prioritized throughout development. From a more strategic perspective, such guidance can help craft decisions on which new [services are best packaged and delivered to customers to help supercharge bank](https://www.financedigest.com/the-gmp-cell-banking-service-market.html "The GMP Cell Banking Service Market") offerings.

Looking long term, ensuring the continued compliance, operational soundness and [security of solutions requires regular risk assessments and strong](https://www.financedigest.com/industrial-cyber-security-solutions-and-services-strong-increase-in-user-base-pans-out-for-north-america-to-lead-market.html "Industrial Cyber Security Solutions and Services – Strong Increase in User Base Pans Out for North America to Lead Market") monitoring processes to be implemented.

From our perspective, we’re working with a number of banks to define new testing strategies, roadmaps and [long-term strategies](https://www.financedigest.com/what-makes-a-good-long-term-investment-strategy.html "What makes a good long-term investment strategy?") in relation to PSD2. It’s interesting to see the wide range of challenges [facing banks](https://www.financedigest.com/analysis-powerful-swiss-central-bank-faces-reform-calls-in-wake-of-credit-suisse-rescue.html "Analysis-Powerful Swiss central bank faces reform calls in wake of Credit Suisse rescue") right now – across standards including PSD2, EMV, nexo, ISO20022 and the payment systems – but the key is to navigate.

The challenge of PSD2, of course, is here and the clock is ticking. But we feel that we are only at the start of something very exciting. The [coming months and years](https://www.financedigest.com/refrigerated-trailer-market-to-exhibit-increased-demand-in-the-coming-years.html "Refrigerated Trailer Market to Exhibit Increased Demand in the Coming Years") are going to see an explosion of ideas and services, but thinking that this is the end of the banks is to underestimate their ability to adapt. Collaboration is the key to successful [consumer](https://www.financedigest.com/what-successful-accounting-looks-like-in-the-age-of-the-consumer.html "What successful accounting looks like in the age of the consumer") services and fintechs can be a stepping stone for the banks to achieve success.


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