Have you ever entrusted your money to a bank based on its comfortable way of handling the account from the web? And while making the decision you did not quite manage to understand their fees and interest rates? I did and it is quite normal.
The banks’ business rules are complicated and entangled so a regular person who has other things to do has no chance to fully comprehend them – hidden in plain sight in small font.
On the other hand the banks have a well visible “user interface” – not just the computerized environment but also the elegant offices, tempting commercials, shiny brochures and beuatiful credit cards – maybe even with your dog imprinted. All is done so that (and banks cannot act differently because the market commands them) to attract the customer toward conditions that are somewhat less favorable than they could be.
Against this medialized reality various internet comparison engines engage in combat that do for you the labor of comparing various offerings and lay them out before you objectively and without any glamorous facade (as long as the engine is not paid by one of the banks which might be an entirely different story). These comparisons work well of instance for offers of travel insurance. You just input the parameters of your journey and get a simple answer with the most advantageous insurance policy for you. For banking services the comparing is somewhat more complicated and difficult.
To the rescue comes a new EU directive on payment services (PSD2) due to become effective next year. It will rule for all banks to offer their clients an electronic communication through a standard interface. In plain language all the banks use the same „forms“ with the same fields on the internet. A piece of software on the side of the client will then transform these plain fields into something more appealing to the user.
This has massive consequences in that the client will be able from their favorite software app to work with several accounts in different banks. They can then easily compare where their money gets the best treatment in terms of fees and interest rates – and naturally give preference to that bank.
They will also be able to select among different software apps the one which gives them the best experience – and perhaps pay for it a little more. With no ties to which bank their money is stored in. So the client will be choosing their app according to its bahavior and choosing their bank according to its business conditions, not vice versa.
We often frown at the EU for regulating some things in excess – and that may sometimes be true. However this regulation makes sense to me.