IDEAS home Printed from https://ideas.repec.org/a/aza/jpss00/y2016v10i1p13-27.html
   My bibliography  Save this article

PSD2: The digital transformation accelerator for banks

Author

Listed:
  • Cortet, Mounaim

    (Senior Manager, INNOPAY, The Netherlands)

  • Rijks, Tom
  • Nijland, Shikko

Abstract

The revised Payment Services Directive (PSD2) is not ‘just another regulation’ requiring a mere operational and compliance approach, but an accelerator of the already on-going change in the fabric of the — digitisation prone — financial industry. The PSD2 provisions on ‘Access to account’ for Payment Initiation and Account Information Services (‘XS2A’) will accelerate this by forcing banks to open up consumer payment accounts for appropriately licensed, innovative (bank and non-bank fintech) service providers. A pivotal element to this concept of opening up payment accounts is the development of Application Programming Interfaces (APIs) by banks. Fintech players are seeking to capitalise on the emerging API landscape and to capture customer and developer mindshare as well as payment and non-payment (data rich service) revenues long taken for granted by incumbent financial institutions. The key challenge for leaders of incumbent financial institutions is to ensure PSD2 XS2A compliance, while at the same time retaining customer relevance and maximising addressable market and revenue potential across a rich transaction services portfolio. APIs could redefine the financial services distribution game of banks. Some financial institutions see PSD2 XS2A and APIs as an opportunity to work closer with emerging fintech companies. Others see it as a threat to their business. This has led to different strategic choices for banking leaders. The authors have identified four generic strategic options (ie, Comply, Compete, Expand, and Transform), fitting the wider spectrum of leader attitudes towards PSD2 XS2A and adoption of APIs as a business strategy. All options come with strategic, tactical, and operational considerations and will be elaborated upon in this paper. Making the ‘right’ strategic decision will require banking executives to (re-)consider their future ambition, desired position in the value chain, the accompanying transaction portfolio, and impact on the operating model.

Suggested Citation

  • Cortet, Mounaim & Rijks, Tom & Nijland, Shikko, 2016. "PSD2: The digital transformation accelerator for banks," Journal of Payments Strategy & Systems, Henry Stewart Publications, vol. 10(1), pages 13-27, March.
    • Handle: RePEc:aza:jpss00:y:2016:v:10:i:1:p:13-27
    as

    Download full text from publisher

    File URL: https://hstalks.com/article/1801/download/
    Download Restriction: Requires a paid subscription for full access.
    File URL: https://hstalks.com/article/1801/
    Download Restriction: Requires a paid subscription for full access.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. José Ramón Martínez Resano, 2021. "Regulating for competition with BigTechs: banking-as-a-service and “beyond banking”," Revista de Estabilidad Financiera, Banco de España, issue NOV.
    2. Richardson Pessoa Diniz, 2024. "Impact of Innovative Work Behaviour and Digitalization on Organization performance: Empirical evidence from Brazil," International Journal of Science and Business, IJSAB International, vol. 33(1), pages 1-17.
    3. José Ramón Martínez Resano, 2021. "Regulating for competition with BigTechs: banking-as-a-service and “beyond banking”," Financial Stability Review, Banco de España, issue Autumn.
    4. José Ramón Martínez Resano, 2021. "Regulating for competition with BigTechs: banking-as-a-service and “beyond banking”," Financial Stability Review, Banco de España, issue NOV.

    More about this item

    Keywords

    PSD2; XS2A; fintech; APIs; bank as a platform; customer relevance; digital transformation;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aza:jpss00:y:2016:v:10:i:1:p:13-27. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Henry Stewart Talks (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.