New regulation affecting the EU payments market that kicks in this week could prove advantageous to asset managers and financial planners, said Alpha FMC's Kevin O'Shaughnessy.
The revised Payment Services Directive PSD2 will allow third parties access to banks' data, such as customers' current account information, and will facilitate payments through their own front end digital platforms.
The aim is to open up and grease the wheels of the EU payments market, while encouraging price competition and making payments safer and more secure. Member States, including the UK, must make the Directive law by 13 January.
O'Shaughnessy, director at the wealth and asset management consultancy, said the regulation could benefit D2C propositions and wealth managers who offer holistic financial planning.
"Banks and finTechs have recognised the potential of this change - with better insight into millions of clients and the funds they hold, the appeal is obvious," O'Shaughnessy said.
"This development has received less attention from asset and wealth management sector, even though it will revolutionise the way wealth managers carry out holistic financial planning and become a key differentiator for those aspiring to market direct to consumers.
"PSD2, when combined with emerging trends such as robo- advice, will cause significant disruption to the way people approach long-term investing. Asset managers must prepare for a more open financial services world, while catering to millennial audiences who expect better digitally delivered experiences."
PSD2 precedes further data governance, the General Data Protection Regulation (GDPR), which aims to improve the way data is collected and stored and impose stricter rules on how it is accessed and shared. The deadline for GDPR is 25 May.
O'Shaughnessy added: "PSD2 has raised many questions around privacy, use of data and the degree to which customers trust certain institutions. The upcoming GDPR regulation is playing in the same area, so asset managers must wait with bated breath to see if the aims of these two blockbuster pieces of regulation will collide."
Meanwhile, the Open Banking Rules also take effect this weekend (13 January), meaning consumers will become the owners of their account data, rather than the banks. Sarah Coles, personal finance analyst at Hargreaves Lansdown, said the rules could potentially allow personal finances and investments to be managed from one app.
"At the moment the rules only apply to the nine biggest banks - and five of them have asked for more time to comply - but there are plans to extend it to all online products with a payment facility. The regulations could also be applied to other financial products (although there are currently no firm plans for this). With sufficient expansion, this could mean apps that bring all your finances together to let you manage them in one place."
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