Open Banking and Inclusive Finance in the European Union: Perspectives From the Dutch Stakeholder Ecosystem

This working paper examines the impact of the revised Payment Services Directive (PSD2) and open banking (OB) platforms on inclusive finance in the EU, with a focus on the Netherlands' fintech ecosystem. While PSD2 aims to enhance financial inclusivity, challenges remain mainly because it was not designed for this purpose. This study identifies key areas for improvement and emphasizes the role of regulators in fostering an inclusive open banking sector in the EU.

Highlights:

• The PSD2 requires adjustments for underserved populations’ specific needs.
• OB improvements can be achieved by organizations formed by MFIs and fintechs in collaboration with banks.
• Regulated technical service providers (TSPs) are crucial to building trust and customer adoption in OB.
• The European Banking Authority (EBA) may function as coordination body to design inclusive rules by engaging with OB stakeholders.
• As inclusive finance moves into open-finance and data eras, an increasing regulatory complexity and scope will require networks of innovative and trusted regulators.