The most famous phrase of the film Mary Poppins, was when the
fictional character, Michael Banks, demanded his money back from the bank,
which led to a full-scale bank run. A
similar situation is now happening in the US, which is considered a jump from
fiction to reality, mainly with the uncertainty surrounding Silicon Valley Bank (SVB) and Silvergate.
On the other side of
the pond, the rise and fall of Credit Suisse has raised many regulatory
questions that are now troubling not only the regulators and the European
central banks but also consumers and credit providers that have relied on Credit Suisse for decades.
The collapse of the bank due to poor financial management has similar
indicators in the US with the collapse of Silvergate and of SVB, yet the root cause of the financial ruin was mainly due to reduced
regulatory checks and balances that are mandated by the regulator, other than lack
of effective financial management.
While the traditional banking sector is in ruins, banking
clients are considering other banking instruments that might suit their needs
in a more seamless and ironclad manner. As
such, it is expected that there will be a rise in demand for open banking
and their respective services, especially in cross-border transactions within
the EU.
PSD2, the Directive that regulates the field of electronic money
institutions, has been the cornerstone of open banking licensing for years. Thus, as there is no current regulatory plan to
legislate under ordinary legislative procedures to issue PSD3, it is now
viewed by many financial institutions at the beginning of their banking
operations globally, especially banks that are not licensed in the EU.
To that effect, the disaster that occurred in
Credit Suisse, bearing in mind the swift response of FINMA, the Swiss
Regulator, that obliged UBS to acquire Credit Suisse, leaves the EU consumers,
not only confused, but flabbergasted.
This uncertainty in the market leads the clients to consider moving their banking from traditional banking to open banking and to multiple
accounts in various financial institutions, both for merchants and for private
banking.
The Absolute PERFECT Sequence Of Pictures To Describe The Credit Suisse Disaster. 🤣 pic.twitter.com/IshsMTgQar
— 🏴☠️ G-MAN 🏴☠️ (@GavinClimie) March 30, 2023
Hence, it is anticipated that the number of applications submitted to
the financial regulators in the EU, will surge dramatically. It is to be expected that in the course of
2023 and 2024, the applications for open banking licenses under PSD2 will not
only increase, but the services requested within the scope of the license will
also enhance. The typical PSD2 license does not include exchange or crypto
exchange services, and the current regulatory framework does not entitle the
central banks to issue such licenses.
Therefore, it will be expected that joint
applications will be launched. And, in case multiple regulators are involved,
the applications will be dealt with separately. For instance, the Dutch Central
Bank (DNB) receives applications for PSD2 licenses, and also for
cryptocurrency exchange registration, yet the AML procedures and risk
assessment undergo scrutiny from the AFM, the Dutch Authority for Financial
Markets.
In times of great uncertainty, great prospects arise and to
that effect, this might very well be a wake-up call to the regulators. Many
market players are now uncertain as to how to follow the new regulatory whirlwind
that has been unveiled in the past few months, which is part of the global recession we
are now in. Even the crypto market, which is not directly correlated to PSD2
regulations, has received backlash from the recent market turmoil.
Mainstream
exchanges are uncertain to the extent that they should liquidize their current
cryptocurrency reserve, and the typical banking routes with the major banks in
the US and the EU are becoming significantly slower. This is why the option of
open banking is becoming increasingly popular amongst the financial market
players, and why it is certain we will witness the renaissance of PSD2.
The most famous phrase of the film Mary Poppins, was when the
fictional character, Michael Banks, demanded his money back from the bank,
which led to a full-scale bank run. A
similar situation is now happening in the US, which is considered a jump from
fiction to reality, mainly with the uncertainty surrounding Silicon Valley Bank (SVB) and Silvergate.
On the other side of
the pond, the rise and fall of Credit Suisse has raised many regulatory
questions that are now troubling not only the regulators and the European
central banks but also consumers and credit providers that have relied on Credit Suisse for decades.
The collapse of the bank due to poor financial management has similar
indicators in the US with the collapse of Silvergate and of SVB, yet the root cause of the financial ruin was mainly due to reduced
regulatory checks and balances that are mandated by the regulator, other than lack
of effective financial management.
While the traditional banking sector is in ruins, banking
clients are considering other banking instruments that might suit their needs
in a more seamless and ironclad manner. As
such, it is expected that there will be a rise in demand for open banking
and their respective services, especially in cross-border transactions within
the EU.
PSD2, the Directive that regulates the field of electronic money
institutions, has been the cornerstone of open banking licensing for years. Thus, as there is no current regulatory plan to
legislate under ordinary legislative procedures to issue PSD3, it is now
viewed by many financial institutions at the beginning of their banking
operations globally, especially banks that are not licensed in the EU.
To that effect, the disaster that occurred in
Credit Suisse, bearing in mind the swift response of FINMA, the Swiss
Regulator, that obliged UBS to acquire Credit Suisse, leaves the EU consumers,
not only confused, but flabbergasted.
This uncertainty in the market leads the clients to consider moving their banking from traditional banking to open banking and to multiple
accounts in various financial institutions, both for merchants and for private
banking.
The Absolute PERFECT Sequence Of Pictures To Describe The Credit Suisse Disaster. 🤣 pic.twitter.com/IshsMTgQar
— 🏴☠️ G-MAN 🏴☠️ (@GavinClimie) March 30, 2023
Hence, it is anticipated that the number of applications submitted to
the financial regulators in the EU, will surge dramatically. It is to be expected that in the course of
2023 and 2024, the applications for open banking licenses under PSD2 will not
only increase, but the services requested within the scope of the license will
also enhance. The typical PSD2 license does not include exchange or crypto
exchange services, and the current regulatory framework does not entitle the
central banks to issue such licenses.
Therefore, it will be expected that joint
applications will be launched. And, in case multiple regulators are involved,
the applications will be dealt with separately. For instance, the Dutch Central
Bank (DNB) receives applications for PSD2 licenses, and also for
cryptocurrency exchange registration, yet the AML procedures and risk
assessment undergo scrutiny from the AFM, the Dutch Authority for Financial
Markets.
In times of great uncertainty, great prospects arise and to
that effect, this might very well be a wake-up call to the regulators. Many
market players are now uncertain as to how to follow the new regulatory whirlwind
that has been unveiled in the past few months, which is part of the global recession we
are now in. Even the crypto market, which is not directly correlated to PSD2
regulations, has received backlash from the recent market turmoil.
Mainstream
exchanges are uncertain to the extent that they should liquidize their current
cryptocurrency reserve, and the typical banking routes with the major banks in
the US and the EU are becoming significantly slower. This is why the option of
open banking is becoming increasingly popular amongst the financial market
players, and why it is certain we will witness the renaissance of PSD2.
