Survey Shows EU Treasurers Find PSD2 Irrelevant

The European Union’s (EU’s) updated Payment Services Directive (PSD2) and Open Banking regulations have been hailed as having widespread impacts on the region’s financial services market, particularly when it comes to the ability of FinTech firms and banks to share data in an effort of streamlined services and innovation. However, corporate treasurers do not necessarily see a meaningful impact from Open Banking regulations, according to a new survey conducted at EuroFinance‘s International Treasury Management conference.

According to reports in Global Finance, the survey, conducted at the event last week, found an estimated 60 percent of treasurers do not feel Open Banking regulations like PSD2 are relevant for them. One panelist who spoke at the event, Medtronic EMEA Treasurer Paul Misere, said he had never heard of PSD2.

“I had to Google it,” he said, according to reports. “PSD2 and Open Banking [are not hot topics] for a lot of multinationals. Treasurers need to have a dialogue with their banks about the opportunities Open Banking provides.”

For another treasury executive at the event, Ireti Samuel-Ogbu — managing director and EMEA head of payments and receivables at Citi Treasury and Trade Solutions — said there may be a disconnect between Open Banking regulations coming into effect at the start of the year and the actual execution of the rules.

“The U.K. has fast-tracked Open Banking,” she said. “The Competition and Market Authority (CMA) has mandated nine U.K. banks publish a single application programming interface (API). But it doesn’t look like Open Banking will go live in Europe until September 2019 when the Regulatory Technical Standards [for open and secure electronic payments under the PSD2] are in place.”

Other professionals highlighted that while the U.K. is working toward standardizing APIs across the banking industry to comply with Open Banking requirements in Europe, a lack of standardization may lead to 4,000 different APIs. Medtronic’s Misere suggested EU-wide API standardization spearheaded by banks or SWIFT. At the same time, researchers found, corporate treasurers are indeed embracing other types of industry disruption, including APIs.

In a recent report by BNP Paribas, PwC, SAP and the European Association of Corporate Treasurers (EACT), researchers found APIs, robotics and artificial intelligence (AI) to be gaining more ground in the corporate treasury function. Separate Global Finance reports, covering the “Journeys to Treasury” report, noted that the findings are the result of another survey conducted at the conference.

Corporate treasurers report their top priority to be optimizing liquidity management, though exploration of how to wield emerging technologies to their advantage is another key focus for EU treasurers today.

When it comes to APIs, researchers noted that, while the technology has the potential to disrupt their industry, professionals emphasized the need for third-party providers that access bank data via API to standardize bank information the same way existing services do for treasurers. The technology “could make systems more intelligent, as you can grab information when you need it,” said an unnamed chief technology officer of a treasury management software company interviewed by the publication at the EuroFinance event.

The data and commentary suggest that corporate treasurers are not necessarily or entirely ignorant to the potential disruption from Open Banking and APIs, though they are unsure about how significant that disruption will be.

Another technological trend experiencing similar uncertainty among corporate treasurers is faster payments, according to reports.

“What is not yet clear at a corporate level is whether the benefits of real-time or instant payments will outweigh the costs,” said Bruno Mellado, BNP Paribas’ head of International Collections & Payments, in a statement. “However, treasurers need to be prepared, particularly for incoming flows.”

He added that faster payment initiatives will have the greatest impact in the corporate finance space on collections, with funds now able to be credited to treasurers’ accounts 24/7, affecting liquidity management.