A glimpse into the ‘PSD2 roll-out by Banks’ Conference

Last Monday, October 14th the ‘PSD2 roll-out by Banks’ conference co-organised by Finologee, KPMG Luxembourg & The LHoFT was held at The LHoFT’s premises. This conference brought together over 70 industry experts and 8 speakers that during the two-hour session tackled everything PSD2, from compliance strategies, roll-out status, lessons learned to what’s next. The conference was a success as the speakers tried to bring and focus on substantial contributions on the subjects that wereas of outmost value for financial institutions in scope of PSD2.

Here’s a quick recap of what the our speakers had to say:

Nasir Zubairi, CEO at The LHoFT, kicked off the conference with an opening speech as he stated: “Thanks to the help of Finologee and other platform providers, we hope that Luxembourg banks are now all set for PSD2”.

Nadia Manzari, Partner at Schiltz & Schiltz, was next to take the stage. The expert provided a general overview of the main changes brought forward by the new regulatory framework. She clearly defined the emerging concepts of Third Party Providers (TPPs), the role of account information service providers (AISPs) and payment initiation service providers (PISPs) as well as the need for Financial Institutions (ASPSP) to give access to these new players (AISPs & PISPs) to their payment accounts when requested by the payment service user (PSU). Nadia also introduced the concept of Strong Customer Authentication (SCA): “SCA introduced by PSD2 is a game changer as it requires the customer to authenticate with at least 2 elements which can be either inherence, possession or knowledge”. Finally, Nadia spelled-out what is the so-called fallback exemption, and which are the guidelines on the conditions to be met by ASPSPs in order to be exempted from the obligation to implement the fallback mechanism.

Right after Nadia’s insightful pitch, Jürgen Rieder, Partner at KPMG Luxembourg, and Vivek Yadav, Senior Manager Strategy & Regulatory at KPMG Luxembourg, covered the different strategic choices that banks have as we slowly move to the Open Banking era: Comply, Compete or Innovate. Jürgen stressed the fact that ASPSPs (banks mainly) can gain various competitive advantages from the changing ecosystem and should definitely seize this opportunity to respond in an agile and innovative way to new developments and changing customer demands. “Since 2007 and PSD1, we have seen a huge emergence of new players, providing new ways of payments. But these actors were not regulated. Now with PSD2 and the status of TPPs, they are legitimate and are new competitors for Financial Institutions. Competition leads to transparency in pricing and to multiple enhanced services for customers. So then, the question is: what is your strategy towards these new actors?” he reflected.

Up next, Jonathan Prince, our own Co-founder & CSO addressed the lessons we’ve learnt at Finologee in the last 12 months helping over 30 banks across 10 european countries to become PSD2-compliant and shared some best practices. Jonathan advocated for a joint approach that gives everyone the best chance of getting an exceptional product over the line: “PSD2 deployment is all about collaboration based on a mix of different expertises: IT, Compliance, Business and Project Management. Once you have defined your team and found the sponsor of the PSD2 project, the work can start.”

Subsequently, Vitus Rotzer, CEO of the Swiss banking software provider New Access, provided some insights on their approach in regard to PSD2. They believe in building partnerships with FinTech specialists in order to provide an enhanced digital experience to their clients. “PSD2 has typically not been on the strategic agendas of our private bank clients. That’s why we choose to collaborate with external partners like Finologee to develop our PSD2 module based on a first-class API technology.” Moreover, Vitus also pointed-out the current situation in Switzerland and other countries in terms of PSD2 adoption into their respective national laws.

Our last speaker of the day was Sébastien Wileczek, Head of Strategy at LaFinBox who raised the topic of maximizing the potential of PSD2 and the account aggregation opportunities for wealth management. He stressed the fact that LaFinBox is offering next-generation solutions that stem from the PSD2 Directive: “PSD2 is just the beginning: If banks want to compete with GAFA, they need to be on the same level and put their focus on their end-customers.” Sébatien explained that LaFinBox acts as a TPP that provides Account Information Services and its ultimate goal is to deliver white-labelled API solutions to financial institutions that want to enhance their web or mobile banking interfaces. By collaborating with Finologee, LaFinBox plans to demonstrate a growing demand for Personal Financial Management (PFM) applications in the private banking and wealth management industries and reach territories outside France.

To conclude the evening, Jean-Louis Schiltz – Ex-cabinet Minister, Professor (hon.) and Attorney – laid out some closing remarks highlighting the fact that the API economy has more than anything shown that choosing your strategic partner is more important than ever.