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Peter Jones, Managing Director, PSE Consulting, speaks about PSD2 favouring new entrants over established players and how banks contend with new regulation.
FinTechs are much more in touch with consumer needs than the banks. History has proven that the banks have not done a good job in providing a value proposition where everone wins. Just look at how banks price their services. They charge $35 for an overdraft
that costs less than $1; $30 for stop payments and credit card late payment fees in excess of $30 too. These high fees are representative that the banks are irrationally creating revenue. This same logic can be applied to foreign exchange too. Banks markup
these fees by over 200%. Fintechs will attack these pricing weakness with better value propositions leaving the banks with a lot of loss leading products that do not pay for themselves. It is time for banks to change since the status quo is not promising.
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