Open banking platform Tink has published an open letter on its website calling for National Competent Authorities (NCAs) to show flexibility around the implementation deadline for PSD2. This, it says, will help to avoid a ‘cliff-edge’ scenario after the final deadline on 14 September. NCAs are the institutions responsible for national PSD2 rollouts across Europe.
On 14 June, three months before the deadline, all banks were required to publish their access interfaces, or Application Programming Interfaces (APIs), which would allow third party providers (TPPs) to access their customers’ financial data to create new financial products. According to Tink’s previous data, however, only two thirds of banks did so, which gave third party providers less time to integrate the new APIs.
New analysis now shows that over a third (36%) of the published APIs are not functional, presenting significant obstacles for TPPs trying to integrate with them. Additionally, a quarter (26%) were still completely unavailable. Only 15% met the requirements set out in the Regulatory Technical Standards, but their quality, performance or user experience still fell short of meeting the requirements to be compliant.
Banking customers to suffer the consequences
The open letter states that this will ultimately impact millions of banking customers across Europe will suffer the consequences.
Tomas Prochazka, VP of Product, Tink mentions in the open letter: “Put simply, if we are forced to migrate to a substandard API environment, many people may find themselves not being able to use the online or mobile-based banking services they have become accustomed to over the past few years.
“Arduous authentication processes, unattractive interfaces, and unreliable service will result in a significant fall in banking customers engaging with new and exciting services.
“In the end, we will be depriving consumers of access to the services they have become accustomed to in a pre-PSD2 world. The services that are currently allowing them to make better, more informed financial decisions.”
Guarantee flexibility and collaborate strongly
Tink is asking NCAs to take the following two actions urgently:
- Guarantee flexibility around the PSD2 implementation deadline, including refusing to grant fallback exemptions to banks whose APIs do not yet meet the required standards.
- Foster stronger industry collaboration to solve the problem and working closely with TPPs and financial institutions to address the current issues with PSD2 APIs, while ensuring that existing services offered by TPPs are not disrupted in the meantime.
Tomas Prochazka, continued: “Showing greater flexibility around the implementation deadline is in everyone’s interest. Rather than rushing into a poor technological environment, we should recognise the state in which we are and give banks the time they need to get up to speed. Thankfully we are already seeing authorities the UK, France and Germany showing promising signs of this.
“Our experience tells us that banks are on board with the open banking journey. We must all now work together to make sure they can deliver so that open banking does not falter.”
Recently, the European Banking Authority published its clarifications to the fifth set of issues that had been raised by participants of its Working Group on APIs under the revised Payment Services Directive (PSD2).