1. Research
  2. Products & Topics
  3. Topics
  4. Banking and financial markets

PSD 2, open banking and the value of personal data

June 28, 2018
Region:
Analyst:
With the new Payment Services Directive ("PSD 2") of the EU, which entered into force on 13 January 2018, payment services in Europe have become the frontrunner of "open banking". Account holders can request, free of charge, that banks transmit their financial data in digital form to third parties. Furthermore, they can authorise third-party providers to initiate payments from their bank account. Personal data are owned by the data subject – this principle also forms the basis of the new General Data Protection Regulation (GDPR). Under the latter, however, there is no obligation to provide a technical solution through which customers can transmit their personal data to third-party providers in a convenient manner. In contrast to the PSD 2, the GDPR is therefore unlikely to stimulate innovation and competition in payments. In the financial sector, competition will thus be distorted. Banks must grant competitors access to customer data and their payment infrastructure, whereas internet platforms, for instance, de facto retain sovereignty over the personal data of their customers as well as access to their platforms. [more]

More documents about "Banking and financial markets"

155 (23-34)
May 14, 2018
23
Developments in artificial intelligence and robotics have far-reaching economic and sociopolitical consequences, with some of them already materialising today. Still, the implications of further progress in these fields are not well understood. Economies around the world are likely to be impacted differently by the diffusion of AI technologies and robotics as wealthy industrial countries might increasingly “re-shore” production. To forge ahead and maximise the benefits for economies and societies, a balance needs to be found globally between successfully promoting key technologies and industries and avoiding the risk of rising protectionism and "knowledge wars". As the pace of technological change and the related launch of new business models are unlikely to slow, the ability of the state and regulators to keep pace is challenged. [more]
March 19, 2018
Region:
25
The major European banks have seen their revenues stabilise in 2017, and through further cost-cutting and improvements in asset quality, their profitability rebounded strongly to the second-best figure in the past decade. However, banks continued to shrink, and both total assets and risk-weighted assets fell substantially. This helped capital and leverage ratios to reach new record highs, finally laying questions about the sector’s capitalisation levels to rest, at least on aggregate. Large European banks lost ground versus smaller competitors and also remained far behind their US peers, although they were able to catch up somewhat on this front. [more]
February 15, 2018
Analyst:
26
The rise of bitcoin and other cryptocurrencies and the decline in cash payments are the background for a new concept: digital cash issued by central banks. An old academic debate about who creates money and how is resurfacing, but what about the user’s perspective? Why would we use crypto euros? Such digital cash would compete against bank deposits, physical cash and private cryptocurrencies to win over consumers in the areas of payments and savings. [more]
February 9, 2018
27
Opinions differ when it comes to bitcoin. Discussions are triggered largely by bitcoin’s spectacular price increasess and are not very informed or nuanced. In this paper we focus on several standard claims, which we will put into context and, if necessary, rectify. This will hopefully help our readers to familiarise themselves with the topic. [more]
January 23, 2018
Region:
Analyst:
28
Economic policy uncertainty in Europe has risen to extraordinarily high levels. This stands in stark contrast to conventional measures of financial market uncertainty which are at historical lows. Uncertainty surrounding economic policies has negative spillover effects to the rest of the economy. It tends to be transmitted to capital markets and to result in higher financing costs for companies. Significant cross-country transmission of economic policy uncertainty is observable within the EU, with the UK being a net exporter. In addition, banks could turn out to be a central channel through which economic policy uncertainty is transmitted to the real economy, via subdued lending to non-financial corporations, in particular to SMEs. [more]
December 15, 2017
Region:
29
The Basel Committee’s recent agreement on final capital rules for global banks is set to have only limited effect on overall capital requirements, but will impact EU banks more strongly than their peers. In recent quarters, European banks have already strengthened their capital ratios substantially and have become more profitable, thanks to moderately better revenues, lower costs and lower loan losses. Balance sheet size and risk-weighted assets have declined, underscoring the continuing lack of growth momentum in the industry. This might change somewhat next year, as European banks could benefit from the strong performance of the economy via a pickup in lending, which so far has remained sluggish. Further tailwinds from declining loss provisions and falling expense levels are less likely though. [more]
November 28, 2017
Region:
30
On November 3, the Dax reached a new record high, at 13,505. It has more than doubled since 2010. However, the commonly used total return index is unsuited for international comparisons. In addition, the Dax which is dominated by manufacturing firms is not representative of the German economy as a whole, which relies much more on the services sector. Despite the recent gains, the German stock market remains underdeveloped. With a market cap of 57% of GDP, Germany continues to rank last among the large European countries. This is not least due to a pension system which hardly involves the capital market, to risk-averse retail investors and to a large share of family-owned companies. [more]
September 13, 2017
Region:
Analyst:
31
Money market funds in the euro area managed assets worth EUR 1.16 trillion in mid-2017. Low interest rates did not hamper the impressive growth by EUR 260 billion during the past three years. But new EU regulation taking effect in 2018 will impose stricter rules on fund managers. However, the measured regulation will probably not cause a major restructuring of the euro area market, in contrast to the reshuffling seen in response to the US money market fund reform. In the future, Brexit could lead to competition for non-EUR denominated money market fund business between the EU and the UK. [more]
August 30, 2017
Region:
32
It is remarkable what and how much has changed in the European banking industry since the global financial crisis erupted almost exactly ten years ago: comparing H1 2017 to the peak of the boom in H1 2007, revenue composition has shifted towards more sustainable sources, with the share of net interest income up to more than half of the total and trading income much diminished. Expenses are down, but only moderately, resulting in a fall in profits to just half of the pre-crisis level. Both the absolute amount of capital and capital ratios have risen dramatically. On the other hand, total assets have declined substantially over the past decade, contributing to a massive de-risking of the sector. [more]
August 10, 2017
Analyst:
33
Robo-advisors are online investment platforms that use computer algorithms to manage client portfolios and are thus part of the FinTech universe. With their user-friendly, automated and low-cost services, robo-advisors pose a challenge to traditional financial advisory services and are growing fast. Online client onboarding is the most crucial step in this process, relying on questionnaires to figure out clients' preferences. Following a conservative approach in their asset selection, robo-advisors mainly invest in ETFs. Portfolio allocation is done via mean-variance optimisation and threshold-based rebalancing is utilised to maintain targeted asset weights. Wealthier and more educated clients are joining millennials as robo-advisory clients. Fees are considerably higher in the EU than in the US where robo-advisors’ AuM are much larger. Robo-advisors can contribute to financial inclusion, while their long-term success relies on a high degree of accuracy and suitability for clients. [more]
June 22, 2017
Analyst:
34
With the growing use of digital payments, the need for physical cash is no longer self-evident. But: Demand for euro cash is on the rise. Euro cash in circulation tripled between 2003 and 2016 to EUR 1.2 trillion and thus, grew faster than GDP at current prices. It is estimated that euro cash is used for domestic payments, hoarded for saving purposes and held outside the euro area at roughly equal parts. [more]
2.7.1