There's a Digital Banking Shake-Up in the UK, And Facebook Wants a Piece of It
Olivier Thirion de Briel
Global Solutions Marketing Director
Digital technology has had a transformational impact on consumer banking habits in the UK, particularly among younger demographics. With the introduction of the Second Payments Services Directive—a piece of European payments legislation that marks an important step toward the Digital Single Market—digital banking will gain even more prominence. But not all consumers are ready to embrace it, especially with data-hungry players like Facebook entering the picture. eMarketer’s Bill Fisher spoke with Olivier Thirion de Briel, global solutions marketing director at secure identity solutions provider HID Global, about trust and security issues that worry consumers.
eMarketer: Are consumers in the UK ready to use exclusively digital for their banking needs?
Olivier Thirion de Briel: It depends on the generation. People around age 60 or 70 are still linked to their branch and want to discuss things with a teller in person. Younger generations are happy to use digital technology because it’s easier and because they can use it everywhere.
eMarketer: Do you think physical branches are completely obsolete to younger generations, or do they still have a role to play?
Thirion de Briel: People are happy to discuss complex operations like investing or taking out a loan with somebody. Physical branches won’t totally disappear, but the need for a branch will shrink. Regular operations, like transfers or withdrawing money, won’t require tellers anymore.
“People want to feel that they are in a secure environment, but they don’t want to be annoyed by additional security steps.”
eMarketer: Do trust and security concerns prevent consumers from trying digital banking?
Thirion de Briel: Absolutely. One of the big challenges in migrating people to digital banking is getting them to trust a mobile banking application or an online banking website. People want to feel that they are in a secure environment, but they don’t want to be annoyed by additional security steps. Banks need to deploy solutions where users know they’re in a secure, controlled environment, without having to perform crazy operations, like copying and pasting long codes or answering questions.
eMarketer: What impact will the introduction of the Second Payments Services Directive [PSD2] have on the digital banking space?
Thirion de Briel: The Second Payments Services Directive is defining and giving data access to two new types of banking stakeholders. First, account information service providers [AISPs] will be allowed to get account information from your bank, see how much you have in your account and aggregate different accounts. Second, payment initiation service providers [PISPs] will facilitate online payments and put merchants directly in touch with your bank so that payments can go directly from account to account without going via a banking card.
“The value for Silicon Valley players right now is not in the number of users that they have but in the amount of data they have on them.”
eMarketer: Will the PSD2 allow Facebook to enter the digital banking space?
Thirion de Briel: Facebook might be going after a PISP license, and I wouldn’t be surprised if it seeks an AISP license, too. The most interesting thing for Facebook will be to get access to consumers’ banking data, which is what PISPs will get with consumer approval. The value for Silicon Valley players right now is not in the number of users that they have but in the amount of data they have on them. Getting access to banking data in Europe and the UK is a gold mine for big guys like Facebook.
eMarketer: Are consumers going to be happy if Facebook gets access to their banking details?
Thirion de Briel: The reality is that people are already sharing pictures of their children, where they go on holidays and other personal things online. Facebook will be innovative enough to introduce nice services that make use of all that data. The majority of users will then have no problem [sharing some banking information] and will see it as a convenient way to take additional actions.