The TSYS Take: What PSD2 Means for Open Banking in the U.S.

Main Content

The TSYS Take: What PSD2 Means for Open Banking in the U.S.

Feb 5, 2019

The TSYS Take: What PSD2 Means for Open Banking in the U.S.

Justin Griggs

By Justin Griggs, senior vice president and product strategist at TSYS

PSD2 is a far-reaching directive that has implications for authentication and fraud, but has also accelerated the concept of open banking as well. As part of this digital transformation, the industry will soon be ready for an API model of engagement with a third-party open ecosystem that will nurture fintech development for the benefit of consumers. Regulation was responsible for this push in Europe, but in the United States, it will be the result of money flowing into fintech. With the feverish pace of innovation and investment here, we believe any future regulation may be a result of a consumer-led push.

This also will usher in an era of 'unbundling the customer.' Rather than owning the entire customer relationship, many banks will offer products and services through integrated third parties. And this is precisely why TSYS has opened our own ecosystem to enable it to work with third parties and partners of all types.

Last year we launched TSYS Developers, our open API architecture that enables our clients to support and react to open banking standards like the ones directed by PSD2. The world is moving too fast for our issuing clients to build everything themselves – we've now made it possible to bring products and solutions to market more quickly, making it easier for issuers to enable fintech partners when they require it.

On our roadmap for later this year is our Digital Identity Platform, which uses machine learning, biometrics and device identification to validate users' digital identities. This will help make the authentication standards set by PSD2 a reality for issuers across the globe. It's all part of our connected ecosystem here at TSYS – no matter what form authentication takes as a result of regulatory or market-driven forces, we are investing to prepare for what comes next.

Read more about PSD2 and authentication