Since its implementation in 2016, PSD2 has become a headache for major banks across Europe. Its acronym can be translated as the Payment Services Directive and, in short, it is a mechanism that obliges all financial institutions to share their customers’ databases (provided they accept) with third parties.
This solution was issued in order to achieve a much more transparent banking ecosystem. It is expected that, as their information is shared, customers will have access to multiple services and products thanks to the companies that will be at their disposal. In this way, the lifestyle will be simpler, and they will have more options to carry out their daily transactions.
This is what is known as Open Banking and, of course, it has taken the main financial institutions by surprise.
However, in this context of confusion, alternatives such as WSO2 Open Banking have emerged. Its development emerges as a great alternative to face the Open Banking PSD2 that so frightens the current banking.
If you still don’t know the features of both, pay attention because we tell you about them.
WSO2 Open Banking
WSO2 Open Banking is a software solution that was developed to meet all PSD2 requirements. Within its design, there are many benefits that far exceed the latter, as it has the appropriate technology for the creation of APIs, the possibility of integration with different banks and applications and the correct analysis of the data they have.
As a platform, WSO2 Open Banking helps to cope with the whole process of the digital transformation of the current banking system. This is because it generates a structure that supports the various changes and also has five essential keys: API administration, integration with banking systems and third parties, access control and identities, data analysis and IoT functions.
This allows WSO2 Open Banking to comply with PSD2 Open Banking. But it also offers other benefits: ease of adaptation to future changes thanks to its package of web applications and the possibility of extending banking to include AISP and PISP services.
With that, this software solution creates the right environment to take on the whole process of digital transformation that, forced by PSD2, has led many to consider a complete change in its structure. In short, WSO2 Open Banking improves the financial system completely.
When compared with the possible short-term consequences for banking generated by PSD2’s Open Banking, it can be seen that its implementation is an opportunity to grow as a financial institution.
Open Banking PSD2
More than a warning, Open Baking PSD2 is a mechanism to improve the action of banks. While for some it could be destructive in the short term, its benefits, in the long run, are greater.
For traditional financial institutions, PSD2 and Open Banking are a problem if this open banking model is not adopted. Some immediate consequences could be a loss of exclusive customers, lack of total control when providing services, a decrease in transaction revenues, increase in competition from Fintech, need to adapt to a mainly digital structure.
At first glance it is disastrous, but when you look deeply at the fact, everything is beneficial. In reality, the trick is to stop looking at PSD2 as something immediate and start perceiving its benefits in the long run.
Among what could be achieved with the implementation of Open Banking PSD2 there is: loyalty of regular customers and the possibility of attracting others by offering better services with their own APIs, increased revenue thanks to digital initiatives related to new products, establishment of relationships with other institutions and investment savings by managing everything through technological platforms.
What does all this mean? PSD2 is an alternative to adapt quickly to the world of Open Banking. Its implementation brings advantages for those who decide to apply the model of open banking. The latter is the result of technological progress and, after all, it is unstoppable.
Open Banking is more than an alternative for change. It is related to the technological evolution that little by little takes all the sectors of daily life. The financial system could not go unnoticed and therefore initiatives such as PSD2 arise.
This whole process of change requires the best current platforms. When trying to enter Open Banking, the ideal is to have solutions that help make the digital transformation a success.
WSO2 and PSD2 are alternatives to this. Knowing their characteristics, the possibility of adaptation to the current environment and their benefits is of great importance. The services that both propose to banks are adapted to each requirement. It is all about knowing how to choose the one that is best suited to each person’s needs. And we can help you with that, contact us!