Four European takes on open banking

In 1943, Jean Monnet, a French civil servant and early proponent of European unification, called for a common economic unity. Eighty years of macroeconomic progress later, Monnet would likely be happy to see his vision extend beyond central bank monetary policy into retail and commercial banks sharing permissioned data via open banking.

 

Yet European history shows that hard-fought unity often has little to do with practical similarity. Approaches to open banking across European nations are bound to have regional commonalities. A choice comparison of the Netherlands, France, Spain and Switzerland uncovers many differences as well.

The most obvious difference is perhaps not the most informative. The Netherlands, France and Spain are members of the European Union; Switzerland is not. Its “market led” approach to open banking ostensibly sets it apart from the EU’s “regulation led” approach under the revised Payment Services Directive (PSD2).

Such a separation is simplistic.

 

First, PSD2 is a directive rather than a regulation. So, EU countries must attain the same results while their means may differ in accordance with how PSD2 is transposed into national laws. The same applies to the proposal for PSD3, although the requirements of the proposed Payment Services Regulation (PSR) will not allow such local variation.

Second, “market led” versus “regulation led” is hardly the dichotomy it appears to be. EU membership does not keep the Netherlands, France and Spain from having distinct markets of their own any more than it keeps Switzerland distinct.

​

Read on