By FINTECH Books Contributor, Richard Davies The next two years promise exciting change in a number of key regulatory building blocks for the financial services industry and beyond. The European Union’s second Payment Service Directive (and UK’s Competition and Market Authority Remedies) will open up licensed 3rd party API access to core account data and payment systems, on a customer permissioned basis. This has the potential to create significant disruption in established payment methods, in particular by better placing bank payment rails to fulfil e-commerce journeys, and a host of fintechs are aiming to play a key role in this regulatory change to ensure excellent security while optimising user experience. It will also be transformative well beyond the payments services businesses that feature in the legislation’s title. Access to account data allows for substantial enhancement of services including from credit providers, and account aggregators / price comparison websites. Other industries like retailers and telcos will also be able to benefit from broadening their value proposition. As such, the regulation promises to be the foundation of substantial innovation and increased competition, and is being closely watched by other regulators around the world. Complementing open banking, digital identity will play an increasing critical role. There is a need to be able to quickly and accurately identify customers as they increasingly utilise multiple providers in an open API driven world. A robust digital identity mechanism would be of great benefit to consumers and companies to eliminate current duplication. There are developments in a number of countries already such as verify.gov in UK, and arguably the most advanced digital identity scheme in the world in Estonia. Given increasing sophistication of financial and cyber crime, questions of reliance and liability will be vital for those providing identity services that are used by a range of other providers in an ecosystem. Many biometric companies are offering solutions that can aid this development, though time is needed to prove maturity at an industrial scale and ensure vulnerabilities are addressed. If you would like to learn more about FinTech please look at our video courses at FINTECHCircleInstitute.com