No EC love for European banks’ screen scraping ban plan
The European Banking Federation’s (EBF) call for the European Commission (EC) to help on a screen scraping ban is not going well.
As reported last week, the EBF wants the ban due to concerns over the privacy of client data, cybersecurity and innovation. It wants the EC not to dismiss a key recommendation made by the European Banking Authority (EBA) on future electronic payments in the European Union (EU). Ultimately, this all boils down to a big battle between fintechs and the banks.
However, EC vice-president Valdis Dombrovskis, has given a boost to the fintech army by asking the EBA to have a rethink.
Dombrovskis says it wants them 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”.
The reasoning behind this decision is because it “would safeguard the continuity of access for fintechs, while still allowing banks to require fintechs to use dedicated interfaces in normal conditions”.
Fintechs have got a reprieve, but this isn’t over yet.
If you need more information from last week, then Wim Mijs, chief executive of the EBF, said at the time: “If banks are forced to accept screen scraping, then PSD2 will never fly the way it was intended.”
With PSD2 on its way, the EBF says this introduces a general security upgrade for third-party access to a client’s data, bringing an end to screen scraping. Such services let third parties access bank accounts on a client’s behalf by impersonating while using their access credentials. According to the EBF, PSD2 calls for the creation of a “technology-neutral level-playing field for banks and fintechs, new and old”.
The proposal requires banks to opt for either creating a “dedicated interface” that lets third parties access bank accounts on behalf of clients, or to upgrade their client interface. These solutions would replace the old practice of screen scraping. According to the EBF, they ensure the continuation of direct access services in the EU in a secure way by letting clients decide for themselves which data can be accessed by third parties.
The EBF was launched in 1960 and consists of 32 national banking associations in Europe that together represent some 4,500 banks and employ about 2.1 million people.