How PSD2 Will Change Europe's Banks For The Better

Banking has always been a very conservative industry. If liquidity drops too low, entire markets can grind to a halt. Open yourself up too much and you become susceptible to fraud and theft. Striking the perfect balance is difficult. In every economy, one of the government's primary concerns is securing a steady flow of money in the door, while trying to ensure that it doesn’t fly out the window.

This is why it is rare to see dramatic changes to the banking industry. But that promises to change as a result of Europe’s recent guidelines on banking standards received a massive overhaul in 2016 in the form of PSD2 or the Revised Payment Service Directive. Once implemented, the new directive promises to remove the current monopoly that banks have on their customer’s account information and payment services. Banks will be required to provide services to facilitate these functions to any company that is interested in competing with them.

Customers and businesses will soon be able to use third-party providers to do everything from checking their account balances, to making ...

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