Banks to address the need for better communications with their customers
Today marks one month until the deadline for compliance with Second Payment Services Directive (PSD2). Coming into effect on 13 January 2018, the legislation will enable consumers across Europe to instruct their banks to share their financial data securely with third parties, making it easier to transfer funds, compare products and manage their accounts.
Currently, the levels of individuals looking to switch accounts is relatively low. Figures by the banking authority CMA highlight that 57 per cent of people have held their personal current account for more than 10 years, while 37 per cent have not switched in more than 20 years.
However opening up the front-end of payments initiation and information services has the potential to dramatically shift the competitive landscape. According to research by Accenture, banks are at risk of losing up to 43 percent of retail payment revenues by 2020, as the market place opens up to smaller, more sophisticated digital banks that break the industry’s traditional boundaries.
Pini Yakuel, CEO of customer relationship experts Optimove, comments: “The disruption coming with the Open Banking initiative will have a marked impact on customer engagement. Customers will be able to compare the value that each financial services company offers them quickly and easily. Banks will have a real fight on their hands to retain a generation of smartphone-empowered, brand-agnostic consumers.”