Under the 2nd Payment Service Directive (PSD2) financial service providers can now get access to relevant customer account data. This access is the core feature of open banking – a concept driving the economy and banking of today into the future. The most important tools for open banking services are PSD2 compliant APIs.
PSD2 developer seeks to create more secure, more advanced, and more capable technical solutions that work in the environment of open banking and are compliant.
The PSD2 developer kit is a set of tools and a test environment where a developer can test and try out the functionality of various tools and apps. Developer kits usually allow access and work only within a controlled development environment, housed by a bank or any other financial institution. In order to get access to that environment, you need to have your PSD2 license and/or specific authorization from either the ECB or your local, domestic payment services authority.
This environment is called a sandbox and is the place for developers to create and test out their creations.
Developers have a lot of ideas. However, regulatory and technical challenges limit them from realizing every single vision. They have to find a way to operate within the confines of PSD2, GDPR, and local directives as well as maximize the available technology. This is where the PSD2 developer kit comes in handy. The kit is able to streamline solving of problems. By housing the most essential tools, kits are tailored to work within a specific sandbox, maximizing the opportunities presented to developers.
In the real world, past testing, they have to also include not only regulatory and technical confines but the realities of the market. Concerns of the businesses and the clients have to be addressed, in order to meet their demands. User-friendliness is probably always the demand because a user-friendly service, especially in the world of finance, is much easier to trust. Tech-savviness can get you a long way but a solution can always compensate for a lack of depth with a user-friendly design. So, the developers can’t be solely focused on the technical and legal aspects of things. They need to also worry about user experience, designs, and UI, amongst many others.
Luckily, the whole concept of open banking is directed at giving the users more freedom and more opportunity to access the best financial services. This means that at the core of open banking lies user-friendly services, meaning that you don’t have to look too far, as a developer, to find a user-friendly approach.
By improving their services and offering much more developed and much more user-friendly payment and account information services, developers can improve the journey of individual customers. But that’s not it!
When pushing technology to its limit and finding more and more ways to bring benefit, developers can move the entire banking industry forward and make it more versatile and suited for the digital age. Automatization and open banking seem to be the next step in the world of banking and PSD2 developers have shown clear intentions to offer the benefits of these technologies to the widest possible audiences.
If PSD2 developers work well, they can do a wide variety of things. For example, banks are always looking to improve their digital architecture’s sustainability and become more user-friendly. By combining a more cost-efficient and automated business model with user-friendliness and open banking, financial institutions can expect to attract new customers without expanding their cost cap too much.
From a practical standpoint, PSD2 developers can greatly reduce the time it takes to issue loans by automating the creditworthiness and payment verification checks. There also is much more efficient risk management. AI tools and open banking APIs are able to automate risk evaluation and can be calibrated according to any financial organization’s risk tolerance parameters. This can, over time, expand and diversify their portfolios according to the best possible model.
Open banking and PSD2-compliant APIs also reduce the time it takes to train the staff and optimizes the implementation of interlinked tools and processes in the future.
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