PSD2 is changing the way people manage their money. Banks need to ensure their security and authentication processes are of the highest quality to evolve with this shifting landscape.
Europe’s banking industry is in the midst of a revolution. The Second Payment Services Directive (PSD2) has marked a new era in the financial services industry that is transforming the need for customer authentication and secure connectivity. Now more than ever before, financial companies are being held responsible for managing the security and privacy of their customers’ data. And Syniverse is playing a crucial role in helping ensure these companies’ success amid this new financial landscape.
PSD2 is, for the first time, allowing bank customers to utilize third-party providers to manage their finances and assist with financial services, all while customers continue to keep their money in their bank accounts. Under this regulation, payment service providers like banks are not only required to provide API access to third-party companies, but they’re responsible for implementing secure customer authentication for a range of mandated situations. As a result, banks must be able to ensure that they properly authenticate access to customer data to meet new EU regulatory requirements.
Among the many ways this access authentication is being managed is through text messaging. Since roughly 75% of bank and financial company customers don’t install their payment service provider’s app, text messaging offers a ubiquitous channel with a simple but effective method for providing access authentication. Through this channel, a one-time password can be sent to a customer’s registered mobile number reliably and securely. In this way, when an API request is received from a third party, a payment service provider can immediately send a password directly to a customer’s phone to authenticate the customer’s identity and enable a transaction.
Syniverse plays a vital role in ensuring compliance with this PSD2 process — without affecting the customer experience. Because one-time passwords have to be received in real time with maximum reliability and minimal delay, payment service providers must use networks of the highest quality and the widest reach. Syniverse’s network is specifically designed to provide this quality of service and global coverage, with a network that features over 900 operator connections that reach over 7 billion devices.
What’s more, the management of this password authentication and other authentication services must be carried out seamlessly, with minimal intrusion and no burdensome extra steps for customers. Our 30-plus years of experience in mobile and our expertise in connecting disparate technologies allow us to do this and to integrate authentication services in the least disruptive way to customers.
Our network also provides protection of crucial data through Syniverse Secure Global Access. This private, members-only network keeps banks isolated from the public internet, protecting them from the growing cyberattacks and data breaches that threaten financial companies on a daily basis. This level of protection is vital for safeguarding millions of customers and transactions and for complying with PSD2’s security requirements.
While helping financial companies ensure their PSD2 compliance today, Syniverse also is focused on integrating the technologies of tomorrow. Syniverse is working on a number of new services to support PSD2, such as integration with major internet payment service providers like WhatsApp and WeChat, as well as adoption of Rich Communication Services, or RCS. This technology will transform text messaging and consumer authentication services for PSD2 with features like advanced video and audio capabilities, location information, and analytics feedback. Syniverse is at the forefront of the effort to apply these new technologies to ensure that banks stay as up to date as possible in their compliance with PSD2.
PSD2 has transformed Europe’s financial landscape forever. It’s crucial that banks stay ahead of this revolution to be able to provide consumer authentication and secure connectivity. Syniverse specializes in services for the singular ubiquitous channel through which all consumers can reliably be reached – text messaging. Moreover, we offer a comprehensive portfolio of services to ensure that payment service providers can meet the stringent requirements mandated by PSD2. And our long history and deep mobile expertise allow us to do this with minimal impact to the customer experience.
With our messaging services, secure network, and new-technology solutions, we’re fully positioned to play a crucial role in enabling financial companies to succeed in this new era.