Many PSD2 challenges remain for financial institutions
Executing European Open Banking legislation (PSD2)’s requirements remains an ongoing challenges for most financial institutions (FIs), which face a mandatory September 14, 2019 deadline to furnish regulated third party providers (TPPs) with access to transactional customer account data, or face the wrath of regulators.
Yet major obstacles remain: not least that a central electronic register of TPPs launched in March by the European Banking Authority (EBA) is not machine readable. For FIs, staying abreast in real time of which TPPs can legitimately (with customer permission) access account data, without falling prey to illicit data access, is a genuine challenge.
It is a challenge that one British startup, Konsentus sees a major opportunity in helping to resolve, and in a pre-Series A funding round announced today the company – founded by Bank of America and Datacard veteran Brendan Jones – won significant support from Mastercard, which led the multi-million round. (The exact size, nor names of other participants has not been revealed).
Mike Woods, CEO, Konsentus, says: “The RegTech market is growing at 45 percent-plus per annum and with 9,000+ Financial Institutions in Europe that must deliver PSD2 open banking, the demand for the Konsentus service is significant and this investment will support an accelerated growth plan across Europe.”
Mastercard’s SVP of Open Banking Jim Wadsworth commented “We see significant potential for the Konsentus service as Open Banking evolves both in Europe and globally.”
Konsentus, which provides its service as a SaaS, essentially provides a middleware layer between Financial Institutions and the TPPs seeking to access their customer data.
It works as a compliance-checker for the FIs, issuing tokens to the TPPs that it has has confirmed are approved, checking for revocations on both sides (the customer side and the TPP/regulatory side) and eIDAS seals and certificates to ensure data integrity & proof of origin. It looks set to be growing business and a name you’ll hear more of.
Not least because with just four months to go until the deadline, open banking consent management and FI audit tools for PSD2 remain remarkably thin on the ground…