Banks have elevated their thinking about the revised Payment Services Directive (PSD2) beyond pure compliance to take a more strategic outlook – and they are viewing this regulatory change as just one of the reasons for embracing open banking based on open APIs. These are among the key findings of a new research report, produced by Finextra in association with Axway, and launched this week during Sibos 2016 in Geneva.

Based on in-depth interviews with a wide range of experts from banks and fintechs across Europe and the rest of the world, the paper explores how banks’ approaches to PSD2 have evolved during 2016, and assesses the opportunities and challenges banks now see the regulation creating, alongside the global move to open banking powered by open APIs.

Since Finextra’s earlier 2016 research paper on the PSD2 topic, it is clear that banks’ approaches to PSD2 have become more strategic. There are still areas where more information is needed about how PSD2 will be implemented in practice, but overall banks are more comfortable with how the landscape will look, and have progressed in their thinking about how to go beyond compliance, in order to leverage new business opportunities from the change.

Another key finding is that the focus on open APIs as a means to enable the openness that PSD2 demands is growing. PSD2 is a key driver of the take-up of APIs but it is not the only one – there is a global move to openness and many global banks are responding to this throughout their operations. Even banks outside Europe (with or without operations directly impacted by PSD2) are looking at the forthcoming change as one of the benchmarks to aim for in an open banking context.

In addition, the research also shows that banks have progressed in their thinking about open APIs as connected to and one part of their broader digitalisation programmes - and as essential components of their overall approaches to the digital ecosystem.

As Bruno Cambounet, Vice President, Banking & Financial Services Solutions, Axway, points out: “It is critical for banks to engage with their ecosystem if they are to guarantee their future success in digital – and open – banking. On the one side are the customers demanding omnichannel and relevant, personalised services. On the other are the banks’ partners – other banks and payment services providers that can play a role in an open banking world in delivering the next generation products, services and interactions that customers are coming to expect.”

To find out more about the research findings and Finextra’s key takeaways on the topics of PSD2 and open banking, download the paper here.