OPEN BANKING / DATA
The impact the Payments Services Directive 2 ( PSD2 ) has had on European financial institutions cannot be understated . A European Parliament Directive , PSD2 essentially makes third-party data sharing easy between financial organisations , payments providers and other bodies , making it possible to build new products and power better customer experiences . In the US , third-party data sharing between financial services providers , or Open Banking , has been driven by the market to match the scale of innovation seen in the EU .
Since its introduction in 2018 , Open Banking hasn ’ t just evolved but “ exploded ”, according to GoCardless Chief Product Officer Andy Wiggan .
“ That we ’ ve gone from introducing ‘ Open Banking ’ as a theoretical concept in 2016 to one in seven digitally active UK consumers having used the technology today is testament to exactly how far we ’ ve come ,” he says .
Not only has PSD2 introduced API standardisation to enhance the ease of transferring data , but it also bolstered standardised security measures across data-sharing partners .
It also mandates strong customer authentication ( SCA ) which requires two types of customer authentication to reduce fraud and make online financial transactions more secure .
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