Welcome!

Blog Feed Post

Preparing for PSD2: Some Critical Considerations

In just three months European banking will undergo a seismic shift brought on by a regulatory event known as the revised Payment Services Directive. Starting in mid-January, banks and other financial institutions will be required to make customer account information available to approved third-party applications via open APIs. The dry technical specifications are not exactly holiday reading, but they describe a game changer so consequential industry pundits are calling it the banking sector’s “iPhone moment.”

For the first time in their long and storied histories, the great European banks are going to find themselves competing on a purely digital playing field. Yet outside a handful of internal development groups, few organizations are prepared to address the far-reaching impacts of what will soon be the new status quo. Regrettably, the consequences for the unprepared are likely be severe.

Most technologists understand PSD2 will fundamentally alter not only payments delivery but also the way their organizations attract and retain customers. They are simply too overwhelmed by the immediate demands of compliance to address longer-term considerations. The European Banking Authority only published the final guidelines for banks and other financial services companies in mid-July. Since then hundreds of development teams have been scrambling to create APIs and applications to access them.

The reality is that APIs and apps alone will not be enough to ward off disruption. According to a research analysis by Accenture, banks in the United Kingdom are poised to lose up to 43% of their payments revenue as a result of the directive and developments like Apple Pay. Accenture says European banks are at a crossroads—either they must resign themselves to a new status as “banking utilities” or they must embed themselves in their customers’ lives like never before.

If they choose the latter path they need to act now to safeguard their relationships with their customers. Not only must they provide innovative services that take care of their customers’ daily needs, but these services must be at least as good as those offered by competitors who are using their data. The good news is banks will have a built-in advantage right off the starting block. Seven out of ten consumers trust their banks to handle their payments over other providers, Accenture found. But the banks’ biggest advantage—their customer data and the relationships it describes—is also their biggest weakness.

Although the effects may not be felt immediately, with time the new services made possible by PSD2 will place an unprecedented load on banking systems as competing payment providers call on the banks’ APIs. Banks risk losing their customers if their digital systems fail to perform. According to the AppDynamics App Attention Span Study, 80% of respondents deleted an app because of poor performance. Scalability will become an even bigger challenge.  At any given moment, any of the more than half dozen PSD2 APIs will be pulling information from tens of internal systems. It should go without saying that an issue within any one of those systems will affect performance. The risk of failure is literally exponential.

My colleague, Andy Skelton, recalled what happened when the bank where he was working exposed an underwriting service as an API a few years ago. The goal of the API was to drive new business, and it succeeded so dramatically that it revealed issues around capacity. Marketing activities by other organizations were generating enough demand to create a slowdown, exacerbating spikes caused by poor internal communication. The DevOps team faced the difficult decision of which requests it should throttle–the bank’s own or those coming in over the API.

The same scenario is likely to play out in the early days of PSD2. At a minimum DevOps teams need to monitor the systems that support the new APIs, and understand how the APIs are being consumed. Tracking data in the aggregate won’t suffice. Banks will need to make sure that API calls are driving business, and they will need to be able to distinguish good partners from bad ones who may be abusing an API or unintentionally performing the equivalent of a denial of service attack.

With development teams stretched to their limits, technical leaders are pushing back on new initiatives. But they cannot postpone thinking beyond PSD2 if they want to establish first-mover advantage. Now is the time to make strategic choices about opening up banking data beyond the requirements of PSD2. For example, banks are in a position to offer far more useful bill-paying portals by establishing relationships with companies outside of the financial sector. Imagine, for example, a service that provides a customer personalized guidance and coaching on achieving his or her financial goals and that also presents approved relevant, real-time and geo-targeted offers from third-parties.

As Field CTO for EMEA at AppDynamics, I work with financial institutions to increase their speed of innovation. These days I feel a bit like Lincoln Steffens, the American journalist who after visiting Soviet Russia at the beginning of the last century famously remarked: “I have seen the future, and it works.” The great changes inspired by PSD2 are happening today. Developers and DevOps teams are getting ready. A few are already poised to take the lead. Their message to the rest of the industry? Catch us if you can.

Learn more about how AppDynamics Business iQ helps businesses compete in the digital playing field.

Firaas is Regional CTO EMEA working with clients to convert performance insights into business outcomes. He is also responsible for setting AppDynamics’ regional product strategy. Before joining AppDynamics he held various positions in IT leadership at Credit Suisse.

The post Preparing for PSD2: Some Critical Considerations appeared first on Application Performance Monitoring Blog | AppDynamics.

Read the original blog entry...

More Stories By AppDynamics Blog

In high-production environments where release cycles are measured in hours or minutes — not days or weeks — there's little room for mistakes and no room for confusion. Everyone has to understand what's happening, in real time, and have the means to do whatever is necessary to keep applications up and running optimally.

DevOps is a high-stakes world, but done well, it delivers the agility and performance to significantly impact business competitiveness.

Latest Stories
As organizations shift towards IT-as-a-service models, the need for managing and protecting data residing across physical, virtual, and now cloud environments grows with it. Commvault can ensure protection, access and E-Discovery of your data – whether in a private cloud, a Service Provider delivered public cloud, or a hybrid cloud environment – across the heterogeneous enterprise. In his general session at 18th Cloud Expo, Randy De Meno, Chief Technologist - Windows Products and Microsoft Part...
Andi Mann, Chief Technology Advocate at Splunk, is an accomplished digital business executive with extensive global expertise as a strategist, technologist, innovator, marketer, and communicator. For over 30 years across five continents, he has built success with Fortune 500 corporations, vendors, governments, and as a leading research analyst and consultant.
To Really Work for Enterprises, MultiCloud Adoption Requires Far Better and Inclusive Cloud Monitoring and Cost Management … But How? Overwhelmingly, even as enterprises have adopted cloud computing and are expanding to multi-cloud computing, IT leaders remain concerned about how to monitor, manage and control costs across hybrid and multi-cloud deployments. It’s clear that traditional IT monitoring and management approaches, designed after all for on-premises data centers, are falling short in ...
Without lifecycle traceability and visibility across the tool chain, stakeholders from Planning-to-Ops have limited insight and answers to who, what, when, why and how across the DevOps lifecycle. This impacts the ability to deliver high quality software at the needed velocity to drive positive business outcomes. In his general session at @DevOpsSummit at 19th Cloud Expo, Eric Robertson, General Manager at CollabNet, will discuss how customers are able to achieve a level of transparency that e...
It is ironic, but perhaps not unexpected, that many organizations who want the benefits of using an Agile approach to deliver software use a waterfall approach to adopting Agile practices: they form plans, they set milestones, and they measure progress by how many teams they have engaged. Old habits die hard, but like most waterfall software projects, most waterfall-style Agile adoption efforts fail to produce the results desired. The problem is that to get the results they want, they have to ch...
Organizations planning enterprise data center consolidation and modernization projects are faced with a challenging, costly reality. Requirements to deploy modern, cloud-native applications simultaneously with traditional client/server applications are almost impossible to achieve with hardware-centric enterprise infrastructure. Compute and network infrastructure are fast moving down a software-defined path, but storage has been a laggard. Until now.
"Venafi has a platform that allows you to manage, centralize and automate the complete life cycle of keys and certificates within the organization," explained Gina Osmond, Sr. Field Marketing Manager at Venafi, in this SYS-CON.tv interview at DevOps at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
"We're focused on how to get some of the attributes that you would expect from an Amazon, Azure, Google, and doing that on-prem. We believe today that you can actually get those types of things done with certain architectures available in the market today," explained Steve Conner, VP of Sales at Cloudistics, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
For far too long technology teams have lived in siloes. Not only physical siloes, but cultural siloes pushed by competing objectives. This includes informational siloes where business users require one set of data and tech teams require different data. DevOps intends to bridge these gaps to make tech driven operations more aligned and efficient.
DXWorldEXPO LLC announced today that the upcoming DXWorldEXPO | CloudEXPO New York event will feature 10 companies from Poland to participate at the "Poland Digital Transformation Pavilion" on November 12-13, 2018.
Without a clear strategy for cost control and an architecture designed with cloud services in mind, costs and operational performance can quickly get out of control. To avoid multiple architectural redesigns requires extensive thought and planning. Boundary (now part of BMC) launched a new public-facing multi-tenant high resolution monitoring service on Amazon AWS two years ago, facing challenges and learning best practices in the early days of the new service.
Digital Transformation is much more than a buzzword. The radical shift to digital mechanisms for almost every process is evident across all industries and verticals. This is often especially true in financial services, where the legacy environment is many times unable to keep up with the rapidly shifting demands of the consumer. The constant pressure to provide complete, omnichannel delivery of customer-facing solutions to meet both regulatory and customer demands is putting enormous pressure on...
The best way to leverage your CloudEXPO | DXWorldEXPO presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering CloudEXPO | DXWorldEXPO will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at CloudEXPO. Product announcements during our show provide your company with the most reach through our targeted audienc...
With 10 simultaneous tracks, keynotes, general sessions and targeted breakout classes, @CloudEXPO and DXWorldEXPO are two of the most important technology events of the year. Since its launch over eight years ago, @CloudEXPO and DXWorldEXPO have presented a rock star faculty as well as showcased hundreds of sponsors and exhibitors!
In an era of historic innovation fueled by unprecedented access to data and technology, the low cost and risk of entering new markets has leveled the playing field for business. Today, any ambitious innovator can easily introduce a new application or product that can reinvent business models and transform the client experience. In their Day 2 Keynote at 19th Cloud Expo, Mercer Rowe, IBM Vice President of Strategic Alliances, and Raejeanne Skillern, Intel Vice President of Data Center Group and ...