The prevailing view of the access to accounts (XS2A) obligation is that incumbent banks will have a more distant relationship with their customers. However, our consumer data brings this opinion into question.
Part of the forthcoming Payment Services Directive 2 (PSD2), XS2A will enable third-party providers to offer sophisticated account aggregation services, disrupting the relationship between banks and their customers. Third-party providers offering this service will be privy to rich customer data, and in return will help customers monetize this data by offering them access to cheaper loans and mortgages. With suggestions that PSD2 will facilitate well-known consumer brands entering the financial services market, it is strongly believed by many that banks will soon only have an arm’s length relationship with their customers.
However, our 2015 Global Retail Banking Insight Survey found that a sizable proportion of consumers were concerned about the security of their information on account aggregators, and the majority would feel safer if their bank was the provider of this service.
In a recent interview with David Hamilton, CEO of white-label account aggregation provider eWise, I asked him what message should be communicated by banks to reassure customers. He said: “We (banks) will never use your data without your explicit consent and you will always have the right to withdraw your consent. [You] should always understand clearly what data is being collected, and for what purpose.”
Banks must adequately prepare themselves for the increased competition that will come once PSD2 is implemented in 2018 and accept they may not be able to maintain their current retention levels. Equally, they should also not accept the prevailing views regarding PSD2 and the elasticity of their future relationships with customers.
By Sean Harrison, Retail Banking Analyst