To take advantage of the revised directive, financial institutions should identify their core business, and start to liaise with fintechs to provide peripheral services and, address customer needs more precisely. The new realities represent a great chance to improve the existing banking system and meet new targets under PSD2 by becoming third party payment services providers (PSPs). Apart from this, open APIs give banks additional benefit such as valuable data about customers coming from third party providers, a larger partnership network, and new sales channel opportunities.
Undoubtedly, the openness of APIs generates some technical obstacles and problems with core banking system overload. A typical core banking system is a legacy monolithic application, designed in the 1980s and deployed to high-end or mid-range hardware, very often a mainframe computer. At that time, it was designed mainly as a transaction processing platform with a ratio of queries to transactions close to 1:1. When the Internet and mobile banking were introduced, the supporting APIs changed this ratio by a factor of 10 each.
The introduction of open APIs will change the ratio of queries to transactions to 1000:1 or even more. To reduce potential system overloads, prevent critical situations and problems with some key processes like the end of day on time, it is necessary to implement an efficient Open API Platform. The right solution may be crucial to growing your business, so it's incredibly important to focus on a few parameters like scalability, security and reporting possibilities.
With a reliable open banking platform, the PSD2 is no longer a danger but becomes a natural continuum in the European Union’s goal of modernising, unifying and opening up Europe’s payment systems and the financial landscape as a whole. For banks, it’s a big step toward customer-centred services.