FX brokers get excited about leveraging bank APIs
FX brokers are expected to leverage bank APIs to speed up client registration under the revised Payment Services Directive, despite the associated regulatory requirements.
One of the core components of the revised Payment Services Directive (PSD2) is permission for third party providers to access bank accounts for the purpose of account data aggregation. As a result, banks are required to deploy Application Programme Interfaces (APIs) that are openly accessible by these third parties.
There is some excitement around how this could impact FX. Disruptive technology consultant Sally Eaves expects FX to become increasingly important and for transparent cross-border transactions to become standard practice, followed by FX API access between continents.
In the meantime, FX brokers will be able to accelerate client registration from the start of next year when the directive comes into effect, assuming they get the appropriate permissions to become payment initiation service providers or account information service providers. That is the view of Celent senior analyst, Gareth Lodge, who says there might even be other opportunities to speed up the process. “For example, the client may instruct just their broker going forward as the broker can request the funds from the bank. The point of PSD2 is to remove the banks’ control of the payments account.”
Full article: https://www.euromoney.com/article/b14yt74jf86pmp/fx-brokers-get-excited-about-leveraging-bank-apis?copyrightInfo=true