The days of banks being anchored to their substantial and ornate physical premises, which often seems more like a place for the worship of finance more than anything else, where being allowed to have an account was a matter of the bank manager’s discretion and where every financial transaction carried with it a certain weighty self-importance are long gone. Bank branches are already much smaller, if still extant, many banking tasks can be done online: one can even speculate on the stock exchange in £10s and £20s – something previously only the preserve of those with thousands to invest and speculate with.
Today, even banking services can be offered by third parties, and this is most often seen with online banks that have no physical presence at all. The EU’s current payment regulation system (the Payment Service Directive or PSD) does not yet cater entirely to these ephemeral and yet very real enterprises. The update to the directive, which will be called PSD2, will make it easier for these third-party businesses to operate, while still offering customers exactly the same level of protection and reassurance that traditional banks used to pride themselves on supplying.
The new regulations aim to flex rather than relax, allowing customers much greater flexibility to not only transfer money to friends and families, but also to run their business accounts from a smartphone, managing payments and deposits while out on the road. Security concerns – always high for financial institutions – have to be simultaneously protective and hacker proof while not being so arduous to access that customers grow weary and take short-cuts or undermine their own security in a bid to save time or stave off frustration. At the moment, mobile phone suppliers are wary about fulling endorsing mobile banking as they work to tighten security: having passwords on devices alongside research into early fingerprint or facial recognition features are one thing that mobile phone suppliers are keen to implement, and the first mobile finances will be apps created by and fully under the aegis of the banks that issue them. Success here will allow third parties to take their first steps towards financial operation.