Abstract
The recent developments in regulation, ICT technologies and purchase and consumption habits of customers are profoundly changing the competitive scenario of the financial services market. In particular in the European context, PSD2, although limited to the payment services segment, is promoting a greater level of competition and efficiency within the market, reducing barriers to entry for new payment service providers (called TPPs, which also include FinTech firms). To this purpose, PSD2 explicitly empowers account holders with the authority to share payment data, removing the financial institution’s role as gatekeeper and starting the Open Banking phenomenon. When banks actively comply with PSD2, new credit and financial ecosystems and Open Banking platforms can arise, in which participants share information through Application Programming Interfaces (APIs) and develop, produce and distribute innovative and value-added financial products and services for the customer. This chapter aims to theoretically examine to what extent information sharing, although limited by regulation, reduces banks' ability to generate value through the management of information asymmetry issues and their ability to build long-term relationships. We argue that banks’ ability to generate value can be negatively affected to the extent that banks decide to preserve their status quo, thus the way in which banks decide to comply with PSD2 is the crucial factor to consider.
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Notes
- 1.
There are two possible access rights depending on data types: i) read access, a permission that is granted to a TPP that can read but not modify files or data (e.g. AISP), and ii) write access, a permission that is granted to a TPP to modify or execute files or data (e.g. PISP).
- 2.
Examples of standardisation initiatives are the Open Banking Standards (UK Open Banking Working Group), NextGenPSD2 (Berlin Group), Controlled Access to Payment Services (CAPS) and Banking Industry Architecture Network (BIAN).
- 3.
Some examples of European FinTechs who obtained AISP or PISP licence are Olinda SAS (a French company that developed Qonto, a banking app dedicated to professionals and MSMEs), Billie GmbH (a German company offering Buy Now, Pay Later (BNPL) services) and Hype S.p.A (an Italian company that offers innovative banking services to individuals and professionals through the eponymous app).
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Cosma, S., Cosma, S., Pennetta, D. (2023). The Rise of Financial Services Ecosystems: Towards Open Banking Platforms. In: Walker, T., Nikbakht, E., Kooli, M. (eds) The Fintech Disruption. Palgrave Studies in Financial Services Technology. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-031-23069-1_8
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