PSD2 and HSM-as-a-Service

PSD2 and HSM as a Service - part 2: FinTech opportunities

The Revised Payment Services Directive (PSD2) mandates certain changes that has the potential to significantly alter how the payments industry operates in the EU. How can these threats be turned into opportunities for FinTechs and Third Party Partners (TPPS) and how can HSM as a service help?

In Part 1 of our series on PSD2 and HSM as a Service, we had a brief look at how these tools can together create a more level playing field in the payment services sector. While PSD2 entitles third party entities access to certain data from banks, HSM as a Service can allow companies to offer industry leading security solutions at a reasonable cost.

In this article, we look at the potential opportunities that this creates for FinTech companies and other Third-Party Partners (TPPs).

It’s all about cross selling

The business model of many BigTech companies has been to gather data to cross sell third-party products. They use insights generated at one source to sell something different. Banks have access to equally valuable data, if not more, since their records are made up of actual financial transactions rather than just an intent or interest data point.

Using this data from banks, TPPs and FinTech companies can offer their own products to those customers. This can be anything from travel products to consumers who spend a lot on such activities to furniture recommendations to someone who recently took a home loan. The possibilities are truly endless. And the key to success here lies in generating the right insights from all the data and detecting patterns that are not otherwise apparent.

Or maybe it’s all about “Presentation”

Thanks to PSD2, Account Information Service Providers (AISPs) can get access to all of a consumer’s bank accounts (with permission). This not only gives them the ability to generate insight for cross selling other products, it also allows them to generate insights that are valuable to the customer herself.

In fact, some customers might even be willing to pay for this insight. It can be anything from a simple window to list all your accounts; to having a digital financial planner at your side who can do everything from budgeting, planning, forecasting to giving you advice and tips to optimise your finances.

The presentation of existing raw data (like a bank statement) into meaningful information like financial advice or insights has a tangible value of its own. This is not something just for the retail customers either.

SMEs with limited resources but multiple bank accounts can potentially save a lot of resources in terms of time, manpower and the optimal use of financial leverage. Companies already spend money on cash or vendor management tools and can suffer monetary losses because of missed payments and such. AISPs and PISPs can play a significant role here and create bespoke product offerings that are customised for each individual client.


The true potential of the creation of this level playing field in the payments sector is only limited by the innovation of entrepreneurs. These innovators, armed with scalable tools like HSM as a Service, can indeed go head-to-head with the banking behemoths. Innovation can never really be forced, but these tools can really enable innovation by giving everyone the ability to compete on a level field.

About the author

Ulrich Scholten is an internationally active entrepreneur and scientist. He holds a PhD in information technology and owns several patents on cloud-based sensors. His research on cloud computing is regularly published in highly rated journals and conference papers. From 2008 - 2015, he was associated research scientist at the Karlsruhe Service Research Institute (KSRI), a partnership by KIT and IBM, where he researched network effects around web-platforms together with SAP Research.

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