European Banks Face Risks In Race To Implement PSD2

Banks and their customers have so far noticed little impact from the EU's second Payment Services Directive (PSD2), which came into force in the European Economic Area (EEA) on Jan. 1 last year. The full potential effect of PSD2--designed to boost competition and the variety of products in the payments space--will only materialize on Sept. 14, when banks' technical implementation needs to be in place. We see imminent and significant threats to European banks from PSD2, but also some opportunities. To navigate the changes successfully, European banks will first need to act swiftly to ensure technical compliance with PSD2 over the next few months. But, in a second step, we believe they will also need to develop a sound digital strategy that incorporates PSD2, so as to remain competitive and at the forefront of product innovation in financial services.

PSD2 establishes the...

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