Europe as driver for Fintech innovation
Why European banks and startups will drive the Fintech revolution
In just about six months the Payment Services Directive (PSD2) will be introduced in the European Union. Then banks have to provide Third Party Providers access to customer service accounts and payment services through Application Programming Interfaces. The new law opens opportunities for startups to provide innovative services that are not possible outside of the EU.
The intention of PSD2 is to increase competition, improve customer service and open a door for new, innovative solutions in the area of mobile banking and payment systems. It will create an even more unified European market for financial services.
As the traditional banks lose their exclusive access to the customer, every third party can, after getting consent from the account owner, read his data and execute payments on his behalf. Apps can aggregate account information from multiple banks, offer optimized payment management and investment solutions. The race is already open to become the new one stop front for financial services, but also many niche products are emerging and will provide specialized financial services more cost effectively and efficiently.
The big banks can still rely on their brands and customers trust. However, the pace of innovations by agile, less regulated Fintech companies can demote them into pure executors if they do not innovate themselves.
Open APIs will bring many benefits for banks as well. The more options the interface will offer, the more consumers will use it. This usage will also provide valuable insights. Overall there will be new criteria for banks to distinguish.
The Payment Services Directive will disrupt the European financial market as we know it and it offers many chances and benefits for consumers, startups, and banks as well.
Billte provides an App for easy invoice management and payment. We got selected for the F10 Accelerator program.