The U.K. government will go "above and beyond" to comply with European payments regulations even after Brexit, according to a leading fintech expert at the U.K. competition regulator.
The second European Payment Services Directive, or PSD2, which came into force in January this year, requires banks to open up customer transaction data to third parties — with permission — in order to initiate payments or provide other products and services.
"The mood music is that the [British] government will go above and beyond to meet PSD2 targets," according to Imran Gulamhuseinwala, implementation trustee to the Open Banking Implementation Entity, part of the Competition and Markets Authority.
"It's a challenging plan, but achievable," he said during a panel discussion at the PayExpo Europe event in London.
Britain is due to exit the EU in March 2019.
After the initial rollout of PSD2, banks still have targets to meet in 2019. This includes Strong Card Authentication, which requires more stringent levels of customer authentication at the moment of a transaction, which banks and fintechs must comply with by September 2019.
U.K. regulators have repeatedly said they will not deviate from EU financial regulation after Brexit.
Gulamhuseinwala also said 2019 would be "the year of Open Banking." Open Banking is a U.K.-specific piece of legislation broadly similar to PSD2, designed to boost competition in financial services. About 200 fintechs are currently awaiting Open Banking authorization, Gulamhuseinwala said.
But other panelists said it would take longer for Open Banking to really take off.
"It will take time before we know which [Open Banking] applications will actually work," Adizah Tejani, an independent fintech expert, said during the panel discussion. "There are fintechs out there that will promise the world. Not all of them will take off. I think 2020 is the year when things will really kick off."
The industry should look at Theranos, the disgraced health technology company, as a cautionary tale about startup companies promising things they will never be able to deliver, Tejani said.
Theranos, a former so-called unicorn startup that claimed to be able to provide blood tests using only very small samples, is in the process of being shut down amid allegations of fraud.