It’s summertime – meaning we all have the opportunity to sit back, relax and catch up on some reading.
There is a lot of coverage out there regarding how PSD2 will impact banking, as well as how its mandate to open API infrastructure to third-party providers will create new business opportunities.
However, the truth is that, with such a rapid flow of news and such a high volume of information, it can be hard to access the most important details about these all-important changes to banking.
Therefore, we’ve focused on some great sources to make this task easier, including renowned bloggers, well-informed report depositories, whitepapers, ebooks, a bank industry tracker and an academic study.
SmartBear: How APIs will make or break your organization’s success (eBook)
Boston-based SmartBear Software is an IT company that specializes in tools for API management, software development, and software monitoring and testing. Given this specialization, SmartBear’s choice to recently publish an Open Banking and PSD2 ebook was no surprise.
The ebook titled, How APIs will make or break your organization’s success, provides a sound overview of the transformative impact of the Open Banking movement and the resulting PSD2 regulation on Europe’s financial sector. The ebook covers a lot of the basics, including chapters on regulatory standards for account aggregation and payment initiation services. It also takes a deep dive into SmartBear’s forte: API management via a sandbox tool.
Half of the ebook focuses on API virtualization, a type of API sandboxing in which a virtual environment filled with real-world customer data is created in order to allow developers to test and tinker with API infrastructure and features before it is deployed. Given that having an API sandbox available, which usually only employs dummy data, is part of the PSD2 regulation mandate, the API data virtualization tools that SmartBear describes are definitely worth learning about.
As SmartBear writes, “data virtualization will mimic the customer data sets you will get via those banking APIs, so you can keep building with realistic data without having to break out credit card details or generate loads of false data.”
In the rapid race to PSD2 adoption, a developer’s time is even more precious. “By being able to realistically mimic the behavior of other APIs in a true environment, you can keep moving ahead without relying on — and paying for — those other services while you build,” argues SmartBear.
Open Banking Tracker (PSD2-compliant bank tracker)
The Belgium-made Open Banking Tracker is one-to-follow for anyone looking to keep abreast of which banks are doing the most to become PSD2-compliant first.
The tracker includes the largest banks in the EU and offers a comprehensive profile that tracks PSD2-mandated specifications, including if the bank has an API portal, sandboxed APIs, payment initiation API, account aggregation API, and strong customer authentication infrastructure. Links to banks that have already published an API portal are included in the tracker, as well as a brief profile on the bank’s basic information.
Interestingly, the tracker takes PSD2 observation to a global level by choosing to track banks outside of the European Union, including a few banks in the US, South Korea, and Turkey. The list also includes several popular neobanks and TPPs, such as Monzo and Transferwise.
Open Banking Project (report depository and blog)
The Open Banking Project is run by Berlin-based software company TESOBE, which specializes in advisory API services that are supported by an active platform of software developers.
The Open Banking Project manages a report depository that includes a variety of downloadable Open Banking reports, project briefs and case studies. Of particular note is its report titled ‘How to comply with and make the most of PSD2’, which covers the critically important PSD2 Regulatory Technical Standards (RTS), a de facto guidebook for developing technical solutions to pass PSD2 compliance inspections.
London School of Economics: Consumer financial consent (report)
Last year, the London School of Economics took a scientific look at how financial service consumers feel about consenting to their private data being used. In the age of open data and GDPR, such studies are invaluable for businesses looking to better understand the human reasons behind the PSD2. Indeed, without consumer consent, no TPPs will be able to operate any new API products to true effect.
LSE’s research combines a mixture of quantitative and qualitative empirical research, alongside academic style desk research. It reveals three key aspects that affect informed consent: provider practices (including how terms and conditions are presented); individual behavior (including perceptions of risk); and social context (including knowledge of the regulatory environment and accepted norms).
Mulesoft: Open Banking platform strategy (whitepaper)
Salesforce-owned Mulesoft is a San Francisco-based cloud-based company that provides integrated SaaS & enterprise applications; it is thus heavily invested in researching how businesses develop APIs. In this whitepaper, titled ‘Open Banking platform strategy: Modernize customer engagement with APIs’, Mulesoft takes a look at the types of mindsets driving digital transformation in banking; strategies for building Open Banking platforms with APIs; and a case study that showcases how a digital platform can improve customer engagement.
In particular, Mulesoft’s chapter on creating a four-stage strategy to build Open Banking platforms with APIs is worth a read. This section includes how to establish a digital strategy, instill an API-drive culture, evaluate and build support technology, and engage your ecosystem.
Chakray (which means “cultivated land” in Quechua) is a Spain-based open source solutions company that has been cataloging a growing depository of reports, mostly with themes relevant to Open Banking and PSD2.
Some recent titles include, How APIs are transforming the banking sector and How to make your business grow with open source APIs. The company has already produced a number of reports that cover important topics related to the PSD2 and the Open Banking movement, such as those on GPDR and open data.
Chris Skinner (fintech blogger)
Skinner is, among many other things, an independent commentator, author and speaker based in London who covers a wide variety of financial news topics on his award-winning blog. He was declared the Best Fintech Author of 2019 by Acquisition International magazine, is repeatedly recognized as an influential fintech writer and is the author of the bestselling books Digital Bank, ValueWeb, and its new sequel Digital Human.
These days, his blog leans heavily towards the substantive fintech headlines of the day, such as this recent post covering a regulator’s view of Facebook’s cryptocurrency project, the Libra.
His style and far-reaching network across the fintech world makes for great and timely reading, especially in the Open Banking space. “Customers should not have to go and find thousands of APIs in the Open Banking marketplace that might be relevant to them or that might work for them. The bank should do this for the customer,” Skinner writes. “In other words, it’s my old rallying call that banks need to be curators of open marketplaces that remove friction from bank processes, rather than developers of end-to-end services for customers aimed at controlling and retaining their relationship in exclusion to all others.”
Skinner’s humorous take on current affairs, as well as his light anecdotes and styling add extra pizazz to his blog. Indeed – this is the only source on this list in which the author writes Monty Python-esque sketches!