By Andrey Martovoy, ABBL, Fintech Adviser.

In light of the approaching transposition of Payment Service Directive II (PSD2) in Luxembourg and taking into account the impact it will have on the national financial services market, ABBL’s Digital Banking and FinTech Innovation Cluster (DBFI) in cooperation with ABBL’s Payments Committee held the ABBL Meets Members event “PSD2 in Luxembourg: On the Way to Open Banking” on 27 June 2018. The event attracted high attention of ABBL members with about 200 registrations.

 

In light of the approaching transposition of Payment Service Directive II (PSD2) in Luxembourg and taking into account the impact it will have on the national financial services market, ABBL’s Digital Banking and FinTech Innovation Cluster (DBFI) in cooperation with ABBL’s Payments Committee held the ABBL Meets Members event “PSD2 in Luxembourg: On the Way to Open Banking” on 27 June 2018. The event attracted high attention of ABBL members with about 200 registrations.

The event was an opportunity not only to inform ABBL members and ABBL FinTech Service Pack users about forthcoming PSD2 legislation in Luxembourg but also to share with the bankers information about mature technological solutions which would help these financial services firms to be PSD2 compliant.

 

Jean Hilger, Head of ABBL’s DBFI Cluster, BCEE, informed ABBL members about the Action Plan of the DBFI Cluster in such areas as:

• Sharing knowledge on digitalisation and FinTech among ABBL members: innovative workshops, larger FinTech matchmaking events, vocational training for banking employees, internal databases, and the FinTech Map of Luxembourg – fintechmap.lu

• Cooperation with regulators (CNPD and CSSF) on such subjects as big data and data analytics, blockchain technology, cryptocurrency and cryptoassests, and regulatory reporting hub

• Contribution to Luxembourg’s FinTech Ecosystem by:

     - 4-year research project on the application of Blockchain technology to KYC processes in financial services

     - promotion of ABBL’s FinTech Service Pack among interested FinTech firms in Luxembourg and

     - attracting IT talents to Luxembourg’s financial services sector

 

The keynote speech by Marc Hemmerling, General Counsel Digital Banking, FinTech and Payments, ABBL, shed light on the fact that PSD2 is not the only challenge traditional financial service providers have to face shortly:

• Enabling technologies like Blockchain (Distributed Ledger Technology), Big Data and Data Analytics, Application programming interfaces (APIs)

• Changing Customer behaviour (Any time, Any where, Any device)

• Emerging FinTech & BigTech

• EU Regulation (pace of developments and the cost of regulation)

• PSD2 is questioning the current role of the banks and PSD3 is to come in a few more years.

 

The «open banking » approach should be carefully considered by banks while helping traditional players to have a better position in the future battle field of monetizing data.

Open banking is a new business model that is to radically reshape the current banking and financial service sector. Indeed, traditional banks have to break up their closed operational and IT infrastructure and open it to third party service providers, be they FinTechs, BigTechs or banks.

With the implementation of the underlying open banking concepts, banks will be able to extend the service offer to their customers and to develop their business by offering services to third parties by sharing proprietary data.

Adopting open banking requires banks to strategically position themselves as producers of services (utilities) offered to third parties at the one extreme or as distributor of third party provided services on the other extreme. However, it is expected that most of the banks will adopt an intermediary position. Some banks or new entities might evolve to pure platforms connecting customers to financial service providers without providing any financial services themselves (Uberization of banking).

Ultimately, banks might even integrate non-financial services linked to their initial business (e.g. assisting the customer when s/he buys a car).

It should be stressed that open banking will only be successful if the trust and cybersecurity issues of the new emerging networks / ecosystems are properly addressed.

 

ABBL helps its members by providing recommendations and by giving guidelines and technical assistance. The ABBL created poles of expertise such as ABBL Payments Committee, PSD2 Implementation Working Group, PSD2 Guide Task Force, PDS2 API Task Force, PSD2 LuxTrust Task Force, Payments Forum as well as the representation of the ABBL on the European level at European Banking Federation and European Payments Council.

Natasha Deloge, Innovation, Payments, Market Infrastructures and Governance Department, CSSF, informed ABBL members about licensing and registration in the context of PSD2. In accordance with the expected transposition, Payment Initiation Service Providers (PISP) will have to be licensed while Account Information Service Providers (AISP) will need to follow a registration procedure. Post Brexit entities licensed as Payment Institutions (PI) or Electronic Money Institutions (EMI) in the U.K. while re-locating to Luxembourg and extending to one or the two new activities will have to apply for a Payment Institution licence. PIs and EMIs licensed in their home EU Member States for PIS or AIS that wish to passport to Luxembourg will need to proceed with Passport notification at the CSSF. Both PISP and AISP in case of successful application will be listed in CSSF’s Public Register.

EBA Guidelines on the information to be provided for the authorisation of payment institutions and e-money institutions and for the registration for account information service providers (11 July 2017) were transposed into national law by CSSF Circular 18/677 of 12 January 2018. CSSF adopts the Guidelines that apply from 13 January 2018, except for section 4.4. of the Guidelines regarding the assessment of completeness of the application, that will apply as from the date of entry into force of the law transposing PSD2.

The second part of the event complemented the visionary and compliance aspects of the PSD2 agenda with demonstrations of off-the-shelf PSD2 solutions that banks can use already now in order not only to be PSD2 compliant but also to open horizons for further innovation. Seven firms pitched at the event:

• Avaloq

• Budget Insight

• CGI

• Finologee

• Isabel Group

• LuxHub

• Sopra Banking Software

 

The ABBL believes the event was a useful initiative to foster banks to go beyond PSD2 compliance and get ready for open banking.


Publié le 05 juillet 2018