On 23 October 2017 daily business newspaper Dienas Bizness published an article by partner Zane Veidemane Bērziņa regarding European Commission’s move against incumbent banks in an attempt to protect interests of FinTech. Thus, in the beginning of October, DG Competition, carried out dawn raids in banks and associations of banks in several Member States. Even though the publicly available information is scarce at this time, European Commission has stated that the alleged anti-competitive practices which are being investigated were “aimed at excluding non-bank owned providers of financial services by preventing them from gaining access to bank customers’ account data, despite the fact that the respective customers have given their consent to such access.” Hence, it seems that soon to be regulated account information services (AIS) and payment initiation services (PIS) are in the spotlight.
Even though the very purpose of the dawn raid is to catch businesses being investigated by surprise, FinTech knew it was just a matter of time before DG Competition acts, and banks should have known as well.
Tension between the incumbent banks and their FinTech rivals has been mounting for quite some time. Screen scraping practices engaged in by FinTech to provide PIS and AIS is just one of the problems which should be solved once PSD2 becomes applicable next January. For those banks which consider stalling access to accounts until application of Regulatory Technical Standards setting out details of communication is mandatory, the recent dawn raid might be a serious signal to reconsider (one can expect the Standards to become applicable in 2019, provided that EBA and European Commission can reach a compromise soon enough).
In the ongoing clash between the banks and FinTech, screen scraping is far from the only battle ground though. Thus, banks currently enjoy a major advantage in that they have access to payment systems, while FinTech companies are forced to use banks’ services to execute payments. One can only imagine how tempted the banks should feel to foreclose FinTechs’ access to the account services or render the access cumbersome by applying disproportionate fees. It remains to be seen whether the ongoing investigation by DG Competition will also shed some light on the boundaries of bank – FinTech relations when banks’ account services are used by FinTech.
Full text of the article is available in Latvian language at: http://www.db.lv/viedokli/eksperti/ek-iesaistas-banku-un-fintech-cina-467985