EC Adopts Regulatory Standards on Customer Authentication Under PSD2
EC is adopting the regulatory technical standards on customer authentication, which will make electronic payments in shops and online safer. These rules implement the EU's recently revised Payment Services Directive (PSD2).
PSD2 is aimed to increase the level of security and confidence of electronic payments. PSD2 requires payment service providers to develop strong customer authentication (SCA). The rules being adopted specify the requirements for common and secure standards of communication between banks and fintech companies. These rules, therefore, have stringent, built-in security provisions to significantly reduce payment fraud levels and to protect the confidentiality of users' financial data, especially relevant for online payments. They require a combination of at least two independent elements, which could be a physical item—a card or mobile phone—combined with a password or a biometric feature, such as fingerprints, before making a payment.
The rules will allow consumers to access more convenient, cost-effective, and innovative solutions offered by payment providers. They allow consumers to use innovative services offered by third-party providers, also known as fintech companies, while maintaining rigorous data protection and security for EU consumers and businesses. These include payment solutions and tools for managing one's personal finances by aggregating information from various accounts. Following the adoption of the regulatory technical standards by EC, the European Parliament and the Council have three months to scrutinize them. Subject to the scrutiny period, the new rules will be published in the Official Journal of the European Union. Banks and other payment services providers will then have 18 months to put the security measures and communication tools in place.
Related Links
Keywords: Europe, EU, Banking, PMI, PSD2, Fintech, Regulatory Technical Standards, Customer Authentication, EC
Previous Article
FDIC and SRB Sign A Cooperation ArrangementNext Article
EBA Single Rulebook: Final Q&A Updates in July 2017Related Articles
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
BIS Bulletin Examines Cognitive Limits of Large Language Models
The use cases of generative AI in the banking sector are evolving fast, with many institutions adopting the technology to enhance customer service and operational efficiency.
ECB is Conducting First Cyber Risk Stress Test for Banks
As part of the increasing regulatory focus on operational resilience, cyber risk stress testing is also becoming a crucial aspect of ensuring bank resilience in the face of cyber threats.
EBA Continues Momentum Toward Strengthening Prudential Rules for Banks
A few years down the road from the last global financial crisis, regulators are still issuing rules and monitoring banks to ensure that they comply with the regulations.
EU and UK Agencies Issue Updates on Final Basel III Rules
The European Commission (EC) recently issued an update informing that the European Council and the Parliament have endorsed the Banking Package implementing the final elements of Basel III standards