The REGTECH Book

What Do PSD2 and Similar Activities Mean for Banks and FinTech Start-ups?

By Vladislav Solodkiy

Managing Partner, Life.SREDA VC and CEO, Arival Bank

In 2016, the UK Competition and Markets Authority (CMA) implemented a widely ranging package of reforms¹ that required banks to (i) implement open banking by early 2018, so as to accelerate technological change in the UK retail banking sector; (ii) publish trustworthy and objective information on the quality of service on their websites and in branches, so that customers can see how their own bank shapes up; and (iii) send out suitable periodic and event-based prompts such as on the closure of a local branch or an increase in charges, to remind their customers to review whether they are getting the best value and switch banks if not. The CMA has also introduced specific measures to benefit unarranged overdraft users, who make up around 25% of all personal current account customers, and small businesses.²

However, the report was viewed with some disdain by the FinTech community and new entrants, who bemoaned the failure of the watchdog to impose tougher sanctions to break the stranglehold of the United Kingdom’s top banks. In its final order, the CMA set out the timetable for introducing key advances such as open banking, the monthly maximum unarranged overdraft charge, standardized business current account opening procedures, and banks having to publish service quality statistics.³

At the end of 2015, the Directorate-General of ...