Everything about legal and other ramifications.
Breaking up the value chain in the financial industry has been explicitly promoted and demanded in all states of the European Union since January 13, 2018 by the Payment Services Directive II, or PSD2 for short. PSD2 gives AIS and PIS open access to customer account data and payment behavior via application programming interfaces (APIs). This creates potential for the use of AI technologies.
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Last week’s post was about how robo advisory services are defined and how they came into being, whether they are serious competition for banks, and what stage of development robo-advisors are at now. Today I present the prevailing business models and strategies of robo-advisors.
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Recently, the Swiss Bankers Association published an overview that outlines the status of open banking in Switzerland and formulates requirements for its further development of open banking. These requirements include the clear strategic positioning of Swiss banks and the joint development of standardized APIs for data exchange between financial institutions and third-party providers. The aim of this overview is to “support the dialogue in the financial center”, as Richard Hess writes in the initial contribution to the blog parade of the Swiss Bankers Association. The Open Banking Summit of the standardization initiative OpenBankingProject.ch pursued the same goal on September 10th, with various presentations focusing on these two requirements.
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The financial sector is currently facing one of its biggest challenges with the Corona pandemic: A collapse in economic growth, high unemployment, credit defaults and volatile stock markets. Furthermore, the old problems such as pressure on margins, increasingly intense competition, the shift of the customer interface towards innovative fintechs and the ubiquitous digitalization have not yet been solved. These developments challenge traditional business models of local banks, but also offer opportunities for those who are willing to change or reinvent themselves.
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In a few years’ time, new or further developed sensors in smartwatches will not only record the wearer’s movements, but also their heart rhythm and breathing as well as their stress levels via measuring their skin surface tension. Around the world, thousands of developers are working on the new possibilities, hundreds of investors are evaluating the economic potential, and millions of consumers are waiting for the new gadgets. Will intelligent machines such as smartwatches with such capabilities bring us one step closer to a happy society?
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