Over the last two quarters, enterprises across Europe have seen a few EU regulations entering into force which are expected to shape their business growth to an uncertain degree. The three most impactful regulations that came into effect were MiFID2 (Markets in Financial Instruments Directive), PSD2 (Payment Services Directive) and GDPR (General Data Protection Regulation). While the main motive of GDPR is to ensure privacy and security of people’s sensitive data by giving them better control over it, MiFID2 and PSD2 are anticipated to shape the Banking and Financial Services sector in that region. The PSD2 directive has opened the European BFSI industry to new players, thus increasing the competition among the institutions and the range of solutions and services for the customers.
This directive is expected to give a push to this industry in Europe as more investments will stream into it from companies who seek to tap the potential this market now holds. Various third-party banking service providers can be expected to enter this market over the next couple of years as the directive allows customers to use their services while the integrity, privacy, and security of their information are taken care of by both the bank and the service provider. As this regulation applies not only to banks but also to fintech companies, we can expect to see higher levels of regulated cooperation between the players in this industry, which will propel the growth of the overall BFSI sector.
In conjunction with this, the MiFID2 directive aims at facilitating cross-border investment services in this region by eliminating many of the trade barriers. As this directive lays significant emphasis on enhancing the transparency between the customers and the banking and financial institutions, there will be an increased adoption of a wider range of services by the customers, which will further propel the growth of the European BFSI industry.
Since these directives are still in the process of shaping the existing environment in the European BFSI industry, we are yet to see how things unfold in the future. Refer to our reports to get a clearer insight into the aligned markets and to know the real impact of these directives on the global level.