Financial institutions (FIs) and merchants in the European Union (EU) have had some time to get used to both the General Data Protection Regulation (GDPR) and the revised Payment Services Directive (PSD2). Some companies have been able to adjust quicker than others, leading to the first-ever fines issued and collected for breach of GPDR within the region.
However, the most intriguing development in the Open Banking world is not the impact of these two regulations inside of Europe, but outside of it. Other regulators in Australia, India and Singapore are examining financial innovation rules of their own, using GDPR and PSD2 as guidelines.
In the latest Merchants Guide To Navigating Global Payments Regulations, PYMNTS analyzes the international impact of the regulations, as well as how banks, merchants and regulators are adapting to Open Banking and security protection rules of their own as developments emerge in Europe.
Around The Data Protection And Security World
Open Banking is continuing to grow in new markets, and regulators both inside and outside of Europe are now turning their attention to security and data protection. The European Data Protection Board (EDPB) recently issued updated guidelines for compliance with GDPR, aiming to help affected banks and businesses answer any lingering questions about the rule. The guidelines are designed to help businesses at all levels to better understand any changes they may still need to make in how they store and interact with personal data of consumers or clients.
Australian regulators are still deciding how Open Banking will affect FIs within their country. The Australian Competition and Consumer Commission (ACCC) has delayed the implementation of financial regulations that would change the way banks and businesses can interact and use personal information, among other effects. The regulation is now slated to roll out in July 2020, rather than the February 2020 deadline previously proposed.
India is yet another market in which Open Banking and security regulations are taking a foothold, with the country’s parliament issuing another draft of its proposed Personal Data Protection Bill. The bill proposes several changes to how online data can be used and stored, as well as the level of access end consumers have to this data. The bill will likely continue to be refined over the next year, with regulators still debating the scope of the new regulation.
For more on this and other stories, visit the Tracker’s News & Trends section.
Open Banking And The Race To Enter Singapore
One of the other markets in which Open Banking and financial innovation will likely explode over the next few years is Singapore, where the central regulator, the Monetary Authority of Singapore (MAS), is consolidating plans for further growth. MAS will offer five digital banking licenses to third-party companies to operate as financial entities within Singapore, but gaining one of those licenses will depend on a variety of factors.
FinTech firms and banks must demonstrate that they would be able to keep up with growth in the Open Banking space, and that they can coordinate with other platforms through technologies like application programming interfaces (APIs). A MAS spokesperson explained how these licenses could lead to Open Banking growth, and significantly change the global financial landscape.
To learn more about how Singapore is relying on APIs and the growth of other technologies as Open Banking spreads, visit the Tracker’s feature story.
Fractured Regulation Rollout Processes Slow Open Banking
Open Banking is continuing to spread quickly in and outside of Europe, but banks, businesses and regulators are starting to hit a few stumbling blocks. Many banks and merchants still have lingering questions about how exactly regulations apply to them, and regulators in one country may have a different interpretation from regulators in another. All of this can lead to certain countries slowing down their innovation pace, while others speed up.
To learn more about how confusing deadlines and financial regulation debates could slow the growth of Open Banking, visit the Tracker’s Deep Dive.
About The Tracker
The Merchants Guide To Navigating Global Payments Regulations, powered by Ekata, is the go-to monthly resource for updates on the trends and changes regarding PSD2, as well as other privacy and data protection regulations.