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19th January 2018
Banks grapple with the technology implications of PSD2 and Open Banking
The Second Payment Services Directive (PSD2) came into effect on 13th January. Consumers will be able to instruct their banks to share data securely with third parties, making it easier to transfer funds, compare products and manage their accounts.
However, according to the Competition and Markets Authority (CMA) several of the UK’s major banks have been granted more time, after indicating that they would fail to meet the PSD2 deadline. Barclays, Royal Bank of Scotland, HSBC, Santander and Bank of Ireland informed the CMA that they could not release all the data needed on their customers in the timeframe required by the new law. This indicates the ongoing technology challenge faced by banks.
Ben Boswell, VP Europe for World Wide Technology, said: “13th January is meant to see the start of disruption for the banking industry. However this kind of technology change can be very complex for banks. It involves dealing with very high-stakes application assurance, meaning the confidence to know that their systems are running, available and secure at all times.
“Banks are essentially service providers, because of the high level of technology infrastructure they provide around the globe. Therefore the level of technology assurances they need are extremely high.
“All legacy applications need to be refactored to fit with the agile API infrastructure. Many banks currently use private APIs to improve information flow internally between legacy systems, so they already have experience of this kind of programming. But the technology and security implications of open APIs are far greater and require a high level of assurance.”