Adapting to PSD2 changes is a dedicated endeavour but very much a gradual transformation for banks, the research found, based on a survey completed by 200 respondents from 89 banks across 14 European countries. 

Despite well under two thirds (58%) of respondents in the survey anticipating being compliant by the January 2018 start date, almost three quarters agree that PSD2 investment has sped up their digital transformation programme.

One reason for the slow move to comply with PSD2 is that banks aren’t convinced there is huge appetite among consumers for the new services- almost half think consumers are not ready for open banking.

Another reason is the complexity involved- PSD2 is seen by banks very much as both a disintermediation threat and chance to leverage the opportunity for commercial gain and industry standing. There is also a perceived contradiction between PSD2, requiring banks to share more data, and incoming GDPR updates, requiring them to be ever more careful about sharing data, to the tune of 94%. Banks need to make sure they do not fall foul of the regulator and incur hefty fines.

Fewer than half expect a return on investment within two years and 81% agree with a minimum expectation of two years ROI.

The overall outlook is one of positivity, however. While it can’t be ignored that almost a quarter (24%) view their stance as merely meeting compliance deadlines, banks in the main see PSD2 as a strategic opportunity to create new products and develop new business models.

Most banks are prioritising aggregation and payment initiation services, and 32% ranked APIs to enable customer applications as their number one or number two priority. An overwhelming 95% agree (65% strongly) that there is a risk of disintermediation if they fail to respond to the change.

And crucially, a large majority (84%) agree the starting point for change is the customer. To achieve their PSD2 objectives, almost 60% of banks would choose to partner with a one-stop-shop provider. Download the paper here to read more.