LONDON (Reuters) - Britain’s financial watchdog said on Tuesday it will implement European Union rules aimed at opening the banking sector to greater competition.
The Financial Conduct Authority (FCA) said the revised Payment Services Directive (PSD2), will also make payments cheaper and more secure.
The changes include a requirement for banks to open up their closely-guarded customer data to other firms, which can use it to offer better services, chipping away at banks’ dominance and ability to cross-sell their own products.
Christopher Woolard, executive director of strategy and competition at the FCA, said in a statement that firms should ensure they understand what they need to do to get ready for the new regime.
The rule changes will affect banks and building societies as well as payment and e-money institutions, with fintech firms expected to benefit substantially from the changes.
PSD2 has to be implemented into national law by January 2018 - more than a year before Britain leaves the European Union.
Reporting by Emma Rumney; editing by Alexander Smith