The REGTECH Book

Align Open Banking and Future-Proof RegTech for Regulators and Third-Party Providers to Deliver the Optimal Consumer Convenience and Protection

By B.J. Perng

CEO, NiveauUp Inc

This chapter explores the application of a transaction model that will pose a picture-perfect scenario of open banking for most consumers or small-scale merchants,¹ upon the second Payment Services Directive (PSD2) and General Data Protection Regulation (GDPR) entering into effect. The transaction model itself operates between well-segregated metadata and communication data, providing an advantage for GDPR compliance. Then, the chapter highlights how online know your customer (KYC) derivatives on their own advancing path may enhance the transaction model. Should a fully automated, end-to-end monitoring process be necessary for consumer protection, a future-proof and purposed RegTech enabling tool can be provided for payment service providers (PSPs), third-party providers (TPPs), or regulators, by coupling secure mechanism to collect and store metadata with advanced KYC derivatives.

Transaction Model (for a Picture-perfect Open Banking Scenario)

We believe aggregating each individual consumer’s (or small-scale merchant’s) access to and control of all possible payment services to a personalized mobile application or web service will offer an overall better usability than letting consumers install, engage, and cross-manage PSPs’ or banks’ applications serving either familiar or different needs, as we all ...