In the wake of the revised payment services directive : a study on how Norwegian banks are responding to PSD2, and how their competitive relationships and roles are affected in consequence

Abstract

The second payment’s services directive, referred to as PSD2, recently went into force. As of April 2019, Norwegian banks are required to open their dedicated interfaces, enabling third parties to provide payment services. This thesis investigates how Norwegian banks have responded to the recent implementation of PSD2, as well as it examines how competitive relationships and roles have changed in result. The findings achieved from this study consist of insight and knowledge about the Norwegian banking and payment market after PSD2. This has been gained through interviews with 11 key personnel within the financial sector in Norway. In total, six big Norwegian banks, three financial institutions, and a FinTech network are represented in the study. Through a comprehensive review of the Norwegian banking market, payment sector and PSD2, we have found that most banks view PSD2 as something more than just a requirement. Several Norwegian banks are thus developing new services to utilize the directive. Account aggregation and overview is the most popular service to develop in response to PSD2. Further, we concluded that a service for subscription management is next on the list. These are innovative services banks view as value-adding. It is a paradox, that most of the services developed by banks in response to PSD2, are not the ones actually requested by customers. As an explanation to this, we have concluded that banks are innovating at a slower pace than anticipated. However, in order to increase innovation and stay competitive, we conclude that banks cooperate with FinTech companies. This is another important finding: the Norwegian banking and payment sector is witnessing an increasing degree of cooperative relationships and coopetition. We conclude that FinTech companies and banks benefit from collaborating in several cases, even if they are competitors in other areas. At last, our final finding relates to what new roles banks are taking in response to PSD2. We have identified four roles: Comply, Supply, Produce and Ecosystem. We conclude that most banks seem to take the role as a producer, while exploring the role of supplier. Some banks are also barely touching upon the role as an ecosystem. However, this is the most demanding role to take, and it will therefore likely take time before we witness anyone succeeding taking this role.