According to Article 96 of Payment Service Directive (PSD) II, payment service providers have until 13th January 2018 to implement a reporting system for major operational and security incidents relating to cash-free transactions. The EBA proposes a classification scheme with four quantitative criteria and three qualitative ones to decide whether an incident needs to be reported.
On 30 November of this year, the Euro Retail Payments Board (ERPB) released “Instant Payments Guidelines”, and more details are starting to emerge: banks and financial service providers will be required to implement instant payments in retail banking and operate them universally from November 2017. This requirement will create major challenges for many financial institutions. The legacy of their IT infrastructure (bringing “technical debt” in its train) means this requirement can only be met with high expenditure and lengthy lead-in times.
My first thought when considering digital transformation, and drawing on my academic background, is to see it as a heavy-sided function with a scaling factor of one. It is only natural to see situations through a subjectively tinged filter that builds on past experiences. If the right perspective is lacking, this may lead to problems because, as with cargo cults, the issue might be oversimplified. This simplistic model is then used to address complex questions. Every analogy has its limits, and it is important to be aware of them. If a wave equation is to be solved, then knowledge of quantum mechanics is required. Applying this thought to digital transformation means a serious approach requires executive management to have thorough knowledge of information technology and how digital business models work in practice.