The Monday mindset: 11 September 2017
Fintech zeitgeist! Every Monday, we might look back at last week; look ahead to this week; share a few thoughts (our own or others); or discuss anything that catches our eye.
If you work in this industry you’ll have undoubtedly been drawn into conversations around the potential of PSD2 and open banking. Especially as regulators and lobbying groups continue discussing the future of existing approaches.
One of the hottest topics has been around the ethics of a practice called screen scraping, something the European Banking Authority (EBA) rejected the European Commission’s amendments on earlier this year.
But it’s clear a lot of the industry aren’t clear on why we need to move on, so let me explain…
Who, what, where and why?
Screen scraping is the action of using a computer programme to copy data from a website. It can also be used to perform actions users would normally perform themselves.
It’s how travel search tools like Skyscanner interact with third parties to aggregate and sort flight and hotel data. More importantly, it was one of the only ways to get access to users’ banking data in the context of a lack of open APIs. A practice popularised by fintech innovators like Sofort, Yodlee and Mint.
But it isn’t a long-term fix…
While screen scraping has been the industry standard for some time, there are three key issues around it that concern me…
- It requires providers to store users’ credentials;
- It legitimises password sharing – often in violation of your bank’s T&Cs;
- It doesn’t allow users to control the scope or duration of access.
On top of all of this it’s also unstable, costly and stifles innovation. Any change a bank makes to its online interface, including a simple button move, takes every screen scraping solution built for that interface out of action until it can be manually fixed.
PSD2 and the path to a better alternative
As GoCardless has explored in our interviews with the industry, the introduction of PSD2 in January 2018 will allow consumers to give trusted third parties access to their data in a way that solves many of the problems outlined above.
Screen scraping has undoubtedly helped get the industry talking about transparency and the importance of open access in banking.
Now it’s time the conversation moves on. Incumbents need to let go of their hangups and realise there’s a new way to do things. And, instead of delaying it, they could have the opportunity to help shape it.
Here’s to a future of banking that is scalable, stable and secure, a future that puts us back in control of our data, a future that is coming now.
Last week’s Monday mindset mused on all the money changing hands in the payments industry.
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