The introduction of PSD2 (Second Payment Services Directive) in January promised so much but has it really changed the game? Although many banks missed the go-live deadline, there are clear signs of progress, too.

So what’s changed since January?

Or rather, has anything changed? There’s no definite yes or no answeraccording to Marie Steinthaler, Head of New Products at peer-to-peer lending and investment service provider Zopa.

Six of the nine largest banks in the UK had actually missed the deadline for the initial roll-out of 13 January, and public awareness of the benefits remain low. The rate of adoption has been picking up steam in the last six months though: especially in cases where consumers are clear about the advantages of connecting their accounts and they trust their financial service provider. In other words, “the trick is to clearly communicate to data-protective consumers what’s in it for them”.

Long live experiences

The future of product design isn’t about products. It’s about experiences. Banks will need to go back to the drawing board and rethink their messaging, risk assessment and value proposition methods,fintech influencer Brett King writes.

Why? In the digital world, banking is more and more embedded in our life, and there is a growing expectation that “banking, payments and credit will just work, in real-time, solving customer problems and helping clients manage their money every day”.

Seismic shifts in retail banking

Retail banking is undergoing a dramatic transformation as the industry has never changed as rapidly as it is today, Jim Marous points out in The Financial Brand. The fourth industrial revolution will tip the balance in favour of organizations that can leverage data and analytics to boost customer experience.

Marous suggests that financial institutions adopt a platform business model and offers four alternatives: opening their existing organization to external providers, building off of another platform, producing their own standalone platform or serving a micro-market.

Stop kidding yourself

When it comes to money matters, your brain is not as rational as you think,a BBVA survey of more than 14,000 employees found. Emotional, cognitive and social factors also come into play and “these behavioral anomalies or biases, lead people to making poor decisions”, resulting in overspending, not saving enough or ignoring risks.

That’s why some banks, including BBVA, take behavioural economics into account when advising their customers. As chief executive Carlos Torres Vila explains, this will “make customers trust us more, because they’ll realize that things are going better for them in their lives”.  


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