Finance Monthly December 2019 Edition

In a perfect world, 2020 would be the year when open banking in Europe flourishes, says J. Bennett, Vice President of Operations and Corporate Development at Signifyd. Cue sunny skies, chirping birds, consumers effortlessly surveying and managing all their personal finances in an app in the palm of their hand, fully confident that their data is protected and in their control. 2020 WILL BE THE YEAR OF RECKONING FOR OPEN BANKING J. Bennett, Vice President of Operations and Corporate Development at Signifyd www.signifyd.com But it’s not a perfect world, of which you are undoubtedly aware. And the fact is, 2020 is not going to be open banking nirvana. The vision has been well articulated. But the vision is not reality — and it will take considerable work for the reality to emerge. That is not to say that 2020 isn’t going to be incredibly significant for open banking and its future. With PSD2 and its related Strong Customer Authentication (SCA) firmly in place, many more European consumers are going to become more familiar with the new frontier of banking. For them, a world in which consumers can conveniently, in one place, see their full financial profile and easily compare terms, fees and interest earned on multiple accounts, loans and investments will be tantalisingly within reach. The promise of easily budgeting and accurately examining every expenditure they make — the ability to better rein in unnecessary or ill-advised spending, the capability to manage subscriptions and suspend underused ones — will be right there in front of them. Regulations and rules allowing for data to be shared among banks, third-party service providers and businesses, including retailers and others selling services, make a whole, new kind of commerce possible. But new paradigms are complicated. This one requires constructing the right technology, alliances and incentives. And the truth is, banks are not fully prepared to offer all that is necessary to seamlessly provide this new form of commerce and consumers appear not ready to take advantage of it. In short, things are going to break. 34 www.finance-monthly.com FINANCE & BUSINESS - OPEN BANKING