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May 28, 2018 • Issue 18:05:02

Open banking:

change is coming, slowly

UK, EU push for openness

Open banking is the moniker hung on a new service model
that makes it possible for customers to authorize nonbanks
they do business with to access their bank accounts in
support of payments and other financial transactions.
"It's about extending banking to nontraditional places,"
Ramaswamy said.

Collaborative data sharing is pretty widespread already,
thanks to APIs, intelligent conduits that banks use to
support seamless integrations with third-party digital
applications, such as financial management programs for
mobile banking. Open banking takes the process a step
beyond simple data exchanges to support account-to-
account payments, often in real time.
By Patti Murphy
The term "open banking" was coined in the United Kingdom
he ways consumers shop and pay for purchases where a new set of regulations took effect in January 2018
have been in flux for years. Credit and debit that mandate the sharing of customer-authorized account
cards continue to replace cash and checks information between different commercial entities to
T as preferred methods of payment, and many effect payments and other transactions. To be part of the
experts expect card payments will give way to new and new open-banking scenario in the U.K., companies need
faster ways to pay. Not any day now, but eventually. regulatory approvals.

"It will move slowly," said Niranjan Ramaswamy, Vice January also marked the start of the European Union's
President, Product Management, Bank Solutions, at revised Payment Services Directive (PSD2). PSD2 puts
banking technology firm Fiserv Inc. Banks first need forth a similar mandate and associated regulations in
to start thinking in terms of new partnerships, revenue member countries.
models and technology investments needed to support
these changes, he said.

"You have to think in terms of 10 to 15 years from now," Contributed articles inside by:
added Rod Hometh, Partner at RPY Innovations, the
payment company formerly known as RocketPay. In an era
when technology advancements are discussed in terms Brandes Elitch ........................................................................................28
of months, not years, 10 to 15 years can seem an eternity. Jeff Fortney .............................................................................................46
Yet initial steps toward this eventuality are occurring Adam Hark ..............................................................................................48
already with the emergence of application programming
interfaces (APIs), particularly in places like the United
Kingdom and the rest of Europe where open banking and TOC on page 3
related regulatory edicts have become hot-button issues.
Continued on page 34