Implementing Open Banking
The banking industry is moving toward Open Banking, sharing customer data with third parties, including fintech companies. This can significantly enhance the banking experience in the future. The challenge is leveraging the full potential of Open Banking while assuring that consumers' data remains safe and that their privacy is not violated. Around the globe countries have been working on setting up an appropriate policy framework.
Europe adopted the Revised Payments Services Directive (PSD2). The PSD2 entered into force on 12 January 2016 and EU Member States were given until 13 January 2018 to transpose it into national law. It gives third-party companies the ability to access bank customer data and process payments on their behalf. It also includes a mandated two-factor authentication to protect consumer data. With America following a liberal approach and Hong Kong focusing on standards to ensure technical compatibility, the very near future of Open Banking will reveal further insight on best practices and development areas.