PSD2 and Open banking news roundup


U.S. banks are playing catch-up with Chinese fintechs

China is rapidly become the global fintech champion. Generating more volume in comparison seems like an easier strategy; institutions assume they just plug simplified, product-driven business models into digital and mobile banking. And if banks pitch customers to invest $1,000 in a portfolio on their apps, they can’t expect much adoption (as experienced by robo advisers). Currently, banks rely on these types of traditional platforms: factory, distribution and marketplace. Banks use artificial intelligence and big data to understand client journeys. This can also be a short-term win and a risky strategy because clients know nothing about banks' efforts to personalize their offers and only receive a product. Once more, Big Tech will always know more than any banks about final clients, due to their prime digital access to personal data. The advisory model is one which is both client-centric and service-based. This will save a bank’s profitability by adding real value to clients and repositioning balance sheets sustainably. Therefore, the platform configuration on digital banking must also address how humans get motivated when it comes to finance. There is the question of whether banks should try to become digital distribution channels of financial products.

S. Korean banks in heated competition over ‘open banking’

Struggling to innovate in a fast-changing, competitive market, South Korean banks have their eye on a new integrated financial service -- open banking. While this new financial technology service increases user convenience, it has also raised concerns about excessive competition. The open banking service is available on Woori Bank mobile app. ( However, Shinhan began advanced registration starting Oct. 25, offering open cash benefits to customers who agreed to use its open banking service. Even after the service kicked off, the open banking system turned out to have operational errors, with some of the apps failing to show account information. Necessary improvements will be made by the official launch date.” The regulator, along with the Korea Financial Telecommunications and Clearings Institute, is working on connecting the open banking service to the “Account Info” service, which allows users to assess his or her account information at a glance.

Mobey Forum’s survey confirms banks as the preferred suppliers of open banking

A new pan- European study from Moby Forum and Aite Group titled ‘Open Banking: Open Minds? Consumer confidence in third party banking services, however, continues to grow. If banks want to protect their place at the forefront of the industry they need to act now, either to offer TPP services under their own brands or to create their own. 91% of the respondents are willing to shift to another payment method, given the convenience and attractiveness of the offer. The Mobey forum study can be found here

Digital banking: Moven app may be a nudge too far

The benefit of banking digitally is that customers have an immediate record of their spending, but they don't want an app that judges them at the same time. Most offer better interest rates than traditional banks, low foreign exchange fees and cashback protected by regulators and conveniently accessed through one mobile application. But the point is now being reached where, for digital banks to stand out from the crowd, the benefits of banking digitally are becoming blurred by gimmicks and ploys to get users to sign up. In October, neobank Moven patented the technology behind its new financial wellness app, which covers "methods and apparatus for promoting financial behavioural change". It is obvious that banks are keen to tap into what they have on offer.

The Business Case for Financial Wellness in Banking

When most people think of Moven, they likely think of Brett King. But Moven’s CEO since December 2017 has been Marek Forysiak, a 30-year banking and financial services veteran. The Financial Brand interviewed Forysiak about the future of Moven, of challenger banks in general, and of traditional banks and credit unions, as well as what the bottom-line is for financial wellness as a banking service.

How do you see the future for challenger banks overall? The long-term viability of challenger banks will be based on their ability to build primary, long-term customer relationships that create value. If they can’t demonstrate that, they will have a difficult time. “If you’re a challenger bank in the U.S., or anywhere, you’re going to have to understand how the banks make money and then operate like that.”

Can Your Financial Wellness Program Solve Millennials’ Money Stress? Forysiak: Implementing technologies to modernize the way that they do business is an issue for many.