How To Comply With PSD2 Open Banking? An interview with Mike Woods, CEO of Konsentus

17-12-2019 | The Blog Series

Konsentus is a RegTech company that was established to provide Identity & Regulatory checking services to Financial Institutions so that they can comply with PSD2 and open banking. Issued through a SaaS-based platform it enables Financial Institutions (ASPSPs) to comply with EU regulation on PSD2 open banking and provide open banking services to their customers, confident in the knowledge that they are only providing data to Third Party Providers (TPPs) who are regulated and have customers’ “explicit consent to use their data. Headquartered in the UK, Konsentus is creating a world-class solution for every Financial Institution in Europe. They are delivering this through utilising the best in open standards, coupled with unique solutions and most of all a belief that they can deliver for clients a cost-effective solution to their regulatory requirements.

Payments, FinTech, FIs, PSD2 Regulations
What does Konsentus do in a nutshell?

Konsentus was founded in January 2018 by three highly experienced individuals who have collectively been working in the payments industry for over 90 years. We identified that there was a need for a simple and easy way for Financial Institutions (FIs) to comply with the new PSD2 regulations for Open Banking. We looked to develop a technology solution with easy integration and low set up costs to support financial institutions with their regulatory and risk management systems in order for them to comply with the new PSD2 regulations.

Fraud, Compliance, TTP
Can you explain PSD2 Open Banking in a bit more detail and share what this will mean for Financial Institutions?

When the Second Payment Services Directive (PSD2) comes into force, FIs must comply with the new regulation. Customers of FIs have the legal right to share their data with regulated Third-Party Providers (TPPs) from this date. This will mean that if a customer requests an FI to share their data with a regulated TPP, the FI needs to do so, only denying access if they believe there is fraudulent activity. As there are no contracts between TPPs and Banks this presents FIs with a highly complex compliance issue – how do they know that the TPP is regulated, the markets they can operate in and that they are indeed who they say they are? This is where Konsentus can help.

“Quite simply, we
provide a regulatory
and identity checking
solution to help
Financial Institutions
process legitimate
transactional requests”

APIs, EBA, transactions, data, SaaS platform
What kind of a solution does Konsentus offer?

Quite simply, we provide a regulatory and identity checking solution to help FIs process legitimate transactional requests in the Open Banking ecosystem. Our Software as a Service (SaaS) solution ensures only regulated entities access FIs’ dedicated interfaces (i.e. Application Programming Interfaces – APIs), systems and data and therefore that their customers’ data is not shared or transacted with unregulated/fraudulent Third Party Providers (TPPs).

Our unique platform operates in realtime and is a central system of record of all regulated entities in the EEA, gathering data from 31 National Competent Authorities (NCAs), the European Banking Authority (EBA) registers and connecting to over 70+ Quality Trust Service Providers (QTSPs). It is the combination of the data held on all these systems and registers which enables the FIs to determine whether a transaction request is legitimate or not. There are very low set up costs and integration is simply via an API. We have recently announced a number of FIs who have signed up to the service and we expect as September’s deadline approaches, many more will onboard onto the SaaS platform.

Who is affected by the new PSD2/ Open Banking regulation?

All FIs that are regulated and provide online transactional accounts. It doesn’t matter what size they are, they could be credit institutions, Electronic Money Institutions or Payment Institutions such as (Barclays Bank, PSI Pay or Transact Payments). They will all need to ensure that they have the appropriate risk management solutions in place and we are ideally placed to help them with this.

What markets does Konsentus operate in?

Although this is a global Open Banking opportunity, our immediate focus is on the European market. Demand outside of the UK has been high, so we recently used the services of PaymentGenes to recruit some highly experienced payments professionals to work with FIs in local markets.

How did you experience the services of PaymentGenes?

We found the team at PaymentGenes to be great to work with. They took the time to understand our requirements and recognised that we needed highly experienced payments professionals who understand not only the payments landscape but how the new regulation will impact our target audience.

Find this article and similar materials in the PaymentGenes’ FinTech Magazine.

PaymentGenes Payments and FinTech Magazine

The Q4 edition of the PaymentGenes Quarterly FinTech Magazine is out now!

You might also want to read our blog on Why you need a Payment Data team in 2020


About PaymentGenes: PaymentGenes is the leading global Payments & FinTech business services firm. Our team offers a unique style of personal service in recruitment and consultancy, enabling your business to grow. Learn more about how we can help your business here.