The Payment Services Directive 2 will be made national law SEPA-wide. After months of controversy and polarising debate, banks and FinTech companies can see positive but challenging conditions to come.
Third parties will gain the right to access banking data from bank customers. At the same time, banks will have to fulfill the 'access to account' (XS2A) requirement, open their infrastructure and grant third parties access to account data. In this way, users will be given the freedom to use their own data in the services of their choice. They can decide on the context for their banking experiences. For many financial players, the PSD2 and the related XS2A issue raise questions. But figo already has the technical answer with its 'xs2a enabler'!
PSD2 in practice
All in all, data sovereignty is the issue, that bank customers are free to decide in which services they want to use their own data - be it multibanking applications, P2P-payment apps or financial services such as Aboalarm. All of these use cases make it clear that banks and banking are becoming increasingly separated from each other. Users want smart and user-friendly tools to manage their banking in an everyday context.
"Our technology has opened up the banks and this open banking world is exactly what we stand for. The person who owns the bank data - that is, each one of us - must have the freedom to decide in what context their own data are used," said André M. Bajorat, CEO of figo. "With the xs2a enabler we have developed a solution that allows banks to play an active role in this - as we call it - liberation process. They can easily integrate the product into their own infrastructure. At the same time, they signal that they take their customers, and their desire for everyday banking in an individual context, seriously."
figo therefore provides the technical solution for fulfilling XS2A with its multifunctional platform, meaning banks do not have to develop this interface themselves. The tool’s extensive management functions include all regulatory requirements for opening up and a billing model for banks to monetize third-party access to banking accounts. That this concept works has already been proven by companies such as Amazon, Apple, Facebook and Google.
"In addition to standard functions which meet the minimum requirements of PSD2, banks with the xs2a enabler can also offer premium features such as categorisation and further processing of revenue data, provision of data beyond the PSD2-required minimum, or notification functions," explains Sebastian Tiesler, CPO of figo.
Extensive experience, technical knowhow and the fulfillment of regulatory requirements define xs2a enabler, a product that enables banks to react quickly to the PSD2-mandated XS2A without the time-consuming process of creating their own solutions. In the development of xs2a enabler, figo took into account existing banking infrastructure by leaving historically-grown systems untouched. The gate is opened via an API which can be managed in accordance with PSD2. In the core of the banking system, everything remains the same. But on the outside, the interface conforms to the most modern standards, allowing third parties secure and controllable access to data from bank customers at any time. The underlying platform technology features rights and access control that define which third parties are allowed to view account information data to what extent and enter payment release data.
The rights and access control of xs2a enabler extends to the user level. Customers can understand which third party has access to their accounts. Access to individual accounts can be granted or withdrawn by customers at any time.