LONDON The European Union’s financial services chief will ask the bloc’s banking watchdog to rethink its proposed ban on “screen scrapping” or financial technology firms directly accessing bank accounts.
It marks a reprieve for fintech firms trying to wrestle market share from long established banks in the fast growing payments and apps sector.
European Commission Vice President Valdis Dombrovskis said on Friday he wants a level playing field between banks and fintech firms in supplying new financial products and services to customers.
A revised EU law on payments services comes into effect next January to spur competition, but draft rules underpinning it have raised hackles at fintech firms.
The bloc’s European Banking Authority (EBA) has proposed a ban on “screen scraping” or when a third party such as a fintech firm accesses bank account details – after a customer’s consent – without identification.
The EBA proposed that fintech firms should go through a dedicated interface set up by banks to access specific data indirectly in a more controlled setting, a step some fintech firms say would act as a barrier to competition.
“We will therefore ask the European Banking Authority to have another look at the draft standards for data interfaces, and at proposals to allow fintechs access to the customer facing interface, whenever the dedicated interface breaks down or is not performing properly,” Dombrovskis said.
“This would safeguard the continuity of access for fintechs, while still allowing banks to require fintechs to use dedicated interfaces in normal conditions.”
The European Banking Federation said on Friday that privacy of client data, cybersecurity and innovation are put at risk by overturning the proposed ban on screen scrapping.
Allowing screen scraping as a backup would mean banks having to maintain at least two interfaces, the EBF said.
Sixty companies and trade associations across the EU signed a “manifesto” this month saying the EBA’s proposed ban would have an adverse impact on competition by insisting on the use of specific technologies.
(Reporting by Huw Jones, editing by David Evans)