Wandhöfer explores that open banking is part of a second wave after the financial crisis and the industry must make way for a new set of challenges when bringing new payments models to market. “Technology is the transformation engine of the entire payments industry. We are still working through regulatory changes after the financial crisis and doing the right thing is a challenge.”

Financial institutions are very well-versed in terms of regulatory change, as seen in 2009 with the introduction of the first Payments Service Directive, but the rise of technology “does not mean that banks need to vanish. There is a new universe of digital money floating around. Change is there and keeps on changing.”

While the evolution of the payments industry has been the hook to transform the traditional sector, fintech has been the springboard for understanding and realising this change, but regulation will need to push this transformation in order for all members of the community to embrace it.

Wandhöfer continues: “Open banking and PSD2 - like all European regulations - are gifts that keep on giving.” There are even rumours of PSD3. She goes on to reiterate that open banking simply leveraging the data that incumbent banks have been “sitting on for years. Data is clearly becoming the ingredient for economic models of the future.”

Alternative currencies have also played an equal part in ensuring that regulators control transformation as a result of technology. Wandhöfer surmises that data provides transparency and new payment models provide inclusion, concluding with a point that Nilixa Devlukia, head of regulatory at the Open Banking Implementation Entity continues.

Devlukia highlights that there is a stark difference between financial services technology in the East and the West, especially when considering the speed of adoption: she references WeChat’s one billion customers when comparing how ATMs took decades to gain ubiquity - but of course, contactless cards were different.

“There is an opportunity here to embed payments infrastructure into national payments so that we can better serve the people of that nation. We need a cocktail of ingredients to make this work and they should all fit together. It is this drive from regulators that motivates fintechs,” Devlukia explains.

14th September 2019 was a key milestone for the banking sector, but the vision of what open banking can do has not yet been realised. “The industry has experienced delays and as consumers, we are in the twilight zone. It is imperative that there is now a coordinated initiative to ensure there is a transparent path forward that ensures a uniform approach of PSD2 and by definition, open banking.”

Customers have continued to complain about the homogeneity of financial services, but as Devlukia states, open banking can offer more choice. “Open banking is the cornerstone of moving forward on this customer journey, choice is not just for the financially wealthy and literate. Open finance will provide bespoke services for areas such as mortgages, investment and lending and put financial services in the palm of your hand. The only barrier to this will be the connectivity of your mobile service provider.

“Open banking should never become another spoke in the wheel of financial exclusion.” She adds that regulators should harness this concept of control and consent should be front and centre of all new financial models so that they are integrated into everyday lifestyle propositions.

Devlukia concludes by stating that the regulation of Facebook’s Libra will be a “defining moment in how regulation is created in the future. There is a need for global collaboration between the central banks; it is not just Facebook that is becoming more cross-border.”