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Account Aggregation – Questionable Viability

The PSD2 (Revised Payment Service Directive) – going to be implemented across SEPA (Single Euro Payments Zone) in 2018 – is going to bring about many changes to how financial services are delivered to customers. The Directive has, however, been in the news since its announcement for one major shift that has caught the market’s attention. It makes it compulsory for banks to open up their APIs to third-party providers, and give them access to account information of customers who have given their explicit consent. Additionally, the Directive lays down the security standards to be followed by all players. Thereby, it encourages competition and innovation, while making the operations more secure.

One of the market players that benefits immensely from this change in rules is the account aggregator. The concept of account aggregators is not new to India. They have been around for more than a decade, using various means to procure customer data, aggregating it, and providing a range of services built on top of data analytics to customers, banks and other market players.

As the concept of account aggregators gained more importance in the emerging financial services scenario, the Reserve Bank of India (RBI), India’s central bank, came ou ...

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