Open banking, a revolutionary concept transforming the financial landscape, relies heavily on the Internet’s power and reach. The seamless flow of data is fundamental to the functioning and success of open banking. The Internet is the conduit for financial data between banks, third-party service providers, and consumers. Application Programming Interfaces (APIs), the gateways to this data exchange, facilitate secure and standardized communication, ensuring that various entities can interact seamlessly within the open banking ecosystem.
The second Payment Services Directive 2, which mandated banks to open their APIs to third-party providers, continues to play an invaluable role in open banking across the European landscape. However, the advancement doesn’t stop here. Anticipating further progress, discussions about the recently launched PSD3 framework have gained traction. PSD3 is expected to refine regulations further, enhancing data security, improving interoperability, and fostering greater competition and innovation.
The envisioned PSD3 platform aims to address emerging challenges and opportunities in the financial sector. Just like in the social media world, it is likely to delve deeper into issues related to customer consent, data privacy, and harmonisation of regulations across the European Union. By doing so, PSD3 will provide a more robust framework, supporting the continued growth and maturation of open banking, ultimately benefiting both businesses and consumers alike.