Global fintech leader Avaloq today announces the launch of dedicated solutions to help financial institutions become fully compliant with ꟷ and capitalise on ꟷ the Payment Services Directive II (PSD2). Financial services firms operating in Europe have until September 2019 to become fully compliant with the regulation, which requires banks and wealth managers to adapt their digital infrastructure and capabilities to allow third-party businesses to access permitted customer data, offer personalised services and become part of the customer’s financial ‘ecosystem’.

PSD2, which came into force in January 2018, regulates payment services and payment service providers throughout the Europe. For the first time it will allow third parties to access customer data (if the customer approves) to provide value-added payments and banking services. Under the implementation process, institutions will have to offer their open Application Programming Interface (APIs) to third-party providers for testing and integration six months before the final implementation date of September 2019. This means that their APIs must be ready from March next year.

In response to high demand from its banking and wealth management clients, Avaloq has formally launched PSD2 software and PSD2 as a service solutions, with an unparalleled range of deployment options tailored to different configurations. Its PSD2 as a service solution comes already integrated into Avaloq’s core banking software and digital banking technology. It can be delivered as a turn-key, secured solution, to banks and wealth managers using software as a service (SaaS) or business process as a service (BPaaS) models as well as banks running Avaloq on their premises.

Paco Hauser, Regional Manager EMEA at Avaloq, said: “Banks operating in the European Economic Area have to comply with PSD2 but will also face competitive risks if they do not stay in control of their clients’ user journeys and data as they integrate with third-party services. This raises significant considerations around seamless performance, authentication and security, GDPR and costs, to name a few. Our new solutions have been developed to address these challenges and let banks and wealth managers benefit by giving their clients access to new functionalities while retaining ownership of the primary client relationship.”

A study¹ by Accenture estimated that by 2020, EUR61 billion of the total banking revenue pool in Europe (equivalent of 7 percent) will be associated with open banking-enabled activities. A separate survey² of 90 European banks by Deloitte found that about half are planning to use PSD2 to become an Account Information Service Provider, which lets customers see all of their account information from different bank accounts in one place online or in a mobile app. In addition, around half intend to launch new products and services.

Thomas Beck, CTO at Avaloq, said: “PSD2 is also a positive catalyst for true innovation and market change. Avaloq firmly believes that institutions that provide greater access and engage openly with third parties will be in a better competitive position and will be able to turn PSD2 regulation into an opportunity to better connect to their clients’ needs and generate additional revenues. Our solutions have been built with this very much in mind: once banks and wealth managers implement Avaloq’s PSD2 solution, they have the foundation for future API business cases via our market-leading, open API offering.”