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Star Wars? No, PSD2 means banking wars

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The revised Payment Services Directive will be a hot topic next year as it could mean a change in traditional banking as we know it, allowing third-party service providers to offer customers alternative banking services, says THOMAS PAYS, co-founder and CEO of i-Pay.

If you have not heard about the revised Payment Services Directive (PSD2) yet, get ready, there will be a lot of talk of it in 2017. Since the Council of the European Parliament passed the PSD2 legislation, the banking sector is bracing itself for a period of immense change, with a lot of companies set to get into the action over the next few years.

In a nutshell, PSD2 allows for, amongst others, digital role players to tap into payments systems traditionally considered the domain of the financial services system. Banks must, according to the regulation, offer third-party service providers ways to access customers’ accounts through open APIs (application program interfaces). This paves the way for the banking sector to evolve quite dramatically, eventually allowing for different types of companies and fintech startups to offer banking services to customers.

“You are actually looking at the collapse of the traditional banking infrastructure and a rebirth of banking as we know it.” These bold words come from Thomas Pays, co-founder and CEO of i-Pay, an Electronic Funds Transfer (EFT) payment gateway based in Johannesburg, South Africa. Pays believes through PSD2, banks are set to lose full control over account information, a key resource which, understandably, they never wanted to share with fintech companies. As innovative and agile as new fintech start-ups are, a number of them were hamstrung by this, with banks arguably stifling innovation and the growth of the industry.

PSD2 was adopted by the European Union (EU) in order to promote innovation in the payments space, improve consumer protection, and to incorporate new and emerging payment services typically provided through digital innovation. While PSD2 is first and foremost focussed on the EU, Pays notes that this regulation will affect South African banks too. “Several local banks have branches in the UK and Europe, and since these fall under PSD2 regulation – and also being on the same back-end as the banks’ South African systems – their whole structure would need to change in order to comply,” notes Pays. He describes the impact of the regulation as a ripple effect that will eventually touch banking in as many as 67 countries.

Here is, for example, the way PSD2 will change the online buying process. Currently, the way shopping is done online allows for a number of role players in the process, including the merchant and customer, the ‘merchant acquirer’ that processes credit card payments on behalf of the merchant, card schemes such as Visa, and finally the customer’s bank. PSD2 creates what is called a Payment Initiation Service Provider (PISP), a go-between which if given permission by the customer, initiates a payment bridge directly between the merchant and the bank. This is possible since PSD2 offers API access to the customer’s bank accounts, and it is in the role of PISP that fintech companies, such as i-Pay, will operate.

Who will benefit the most from PSD2? Pays believes that through the new banking ecosystem, the main winner will be the consumer, since it will not only be more convenient to transact online, but also safer. “PSD2 is taking online banking infrastructure and gearing it towards an environment which is stronger and more robust – much more so than the current method of buying online with credit cards,” he elaborated. The merchants too are set to benefit, since they are looking at much smaller transaction fees and more convenient ways to accept payments.

Pays believes that even though PSD2 opens the market for innovative companies, the exact type of innovation it might herald is not yet known at this stage. “PSD2 is going to shock the market not just on a technological level, but also with time through the innovation it will drive. At this stage, we can only speculate how banking is going to work in future,” Pays says.

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Legion gets a pro makeover

Lenovo’s latest Legion gaming laptop, the Y530, pulls out all the stops to deliver a sleek looking computer at a lower price point, writes BRYAN TURNER

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Gaming laptops have become synonymous with thick bodies, loud fans, and rainbow lights. Lenovo’s latest gaming laptop is here to change that.

The unit we reviewed housed an Intel Core i7-8750H, with an Nvidia GeForce GTX 1060 GPU. It featured dual storage, one bay fitted with a Samsung 256GB NVMe SSD and the other with a 1TB HDD.

The latest addition to the Legion lineup has become far more professional-looking, compared to the previous generation Y520. This trend is becoming more prevalent in the gaming laptop market and appeals to those who want to use a single device for work and play. Instead of sporting flashy colours, Lenovo has opted for an all-black computer body and a monochromatic, white light scheme. 

The laptop features an all-metal body with sharp edges and comes in at just under 24mm thick. Lenovo opted to make the Y530’s screen lid a little shorter than the bottom half of the laptop, which allowed for more goodies to be packed in the unit while still keeping it thin. The lid of the laptop features Legion branding that’s subtly engraved in the metal and aligned to the side. It also features a white light in the O of Legion that glows when the computer is in use.

The extra bit of the laptop body facilitates better cooling. Lenovo has upgraded its Legion fan system from the previous generation. For passive cooling, a type of cooling that relies on the body’s build instead of the fans, it handles regular office use without starting up the fans. A gaming laptop with good passive cooling is rare to find and Lenovo has shown that it can be achieved with a good build.

The internal fans start when gaming, as one would expect. They are about as loud as other gaming laptops, but this won’t be a problem for gamers who use headsets.

Click here to read about the screen quality, and how it performs in-game.

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Serious about security? Time to talk ISO 20000

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By EDWARD CARBUTT, executive director at Marval Africa

The looming Protection of Personal Information (PoPI) Act in South Africa and the introduction of the General Data Protection Regulation (GDPR) in the European Union (EU) have brought information security to the fore for many organisations. This in addition to the ISO 27001 standard that needs to be adhered to in order to assist the protection of information has caused organisations to scramble and ensure their information security measures are in line with regulatory requirements.

However, few businesses know or realise that if they are already ISO 20000 certified and follow Information Technology Infrastructure Library’s (ITIL) best practices they are effectively positioning themselves with other regulatory standards such as ISO 27001. In doing so, organisations are able to decrease the effort and time taken to adhere to the policies of this security standard.

ISO 20000, ITSM and ITIL – Where does ISO 27001 fit in?

ISO 20000 is the international standard for IT service management (ITSM) and reflects a business’s ability to adhere to best practice guidelines contained within the ITIL frameworks. 

ISO 20000 is process-based, it tackles many of the same topics as ISO 27001, such as incident management, problem management, change control and risk management. It’s therefore clear that if security forms part of ITSM’s outcomes, it should already be taken care of… So, why aren’t more businesses looking towards ISO 20000 to assist them in becoming ISO 27001 compliant?

The link to information security compliance

Information security management is a process that runs across the ITIL service life cycle interacting with all other processes in the framework. It is one of the key aspects of the ‘warranty of the service’, managed within the Service Level Agreement (SLA). The focus is ensuring that the quality of services produces the desired business value.

So, how are these standards different?

Even though ISO 20000 and ISO 27001 have many similarities and elements in common, there are still many differences. Organisations should take cognisance that ISO 20000 considers risk as one of the building elements of ITSM, but the standard is still service-based. Conversely, ISO 27001 is completely risk management-based and has risk management at its foundation whereas ISO 20000 encompasses much more

Why ISO 20000?

Organisations should ask themselves how they will derive value from ISO 20000. In Short, the ISO 20000 certification gives ITIL ‘teeth’. ITIL is not prescriptive, it is difficult to maintain momentum without adequate governance controls, however – ISO 20000 is.  ITIL does not insist on continual service improvement – ISO 20000 does. In addition, ITIL does not insist on evidence to prove quality and progress – ISO 20000 does.  ITIL is not being demanded by business – governance controls, auditability & agility are. This certification verifies an organisation’s ability to deliver ITSM within ITIL standards.

Ensuring ISO 20000 compliance provides peace of mind and shortens the journey to achieving other certifications, such as ISO 27001 compliance.

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