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PSD2 API deadline should be embraced as an opportunity

Danny Healy, financial technology evangelist with MuleSoft

Tomorrow’s PSD2 deadline – the point by which banks must make their open APIs available for testing by payment and account information service providers – should be treated by banks as an opportunity and not a threat, a fintech visionary has claimed.

“Banks are now required to have their APIs available for testing by authorised third-party service providers,” said Danny Healy, financial technology evangelist with MuleSoft, the vendor of integration software for connecting applications, data and devices. “While this PSD2 milestone will make a certain level of openness mandatory, banks should avoid the urge to simply check the PSD2 box and move on. Instead they should see the mandate as an opportunity for competitive differentiation.”

To differentiate themselves, commented Healy, banks need to design their APIs in a way that makes it easy for third parties to collaborate and partner with them to drive mutual gain: “For example, a traditional bank could open up an API that allows fintech innovators to deliver new services that significantly enhance the online banking experience,” he added. “This could drive greater customer satisfaction and loyalty for the bank, while giving fintechs access to a vast customer base. These partnerships can be fostered by packaging up crucial business processes — like corporate travel, procurement to payment, or treasury management — as productised APIs in an application network. In this way, financial services organisations can use PSD2 to enable the discovery and reuse of one another’s capabilities to compose innovative new banking services.”

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