The European Banking Federation (EBF) has asked the EU Commission to support a ban on “screen scraping”.
Screen-scraping services, seen as a first-generation direct access technology, allow third parties to access bank accounts on a client’s behalf using the client’s access credentials.
The Revised Directive on Payment Services (PSD2) introduces a general security upgrade for third-party access to a client’s data.
Earlier this month, 65 European fintech firms made their opposition to this known, stating in a manifesto (PDF) that “[T]he only functioning technology used for bank-independent [payment initiation services] and [account information services] must not be foreclosed.”
Privacy of client data, cybersecurity and innovation are all at risk if European Banking Authority (EBA) standards are dismissed and screen scraping continues, the EBF argues.
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. The EBF wants to see PSD2 delivered within the framework of (EBA) standards and the end of screen-scraping.
The European Commission appears to be willing to go against the EBA advice and allow screen-scraping to continue.
Then there is some ridiculous analogy to putting a diesel engine on an aircraft. Having to recode your fintech software to PSD2 – which may be incomplete and missing important functionality – is expensive and thus weeds out the crop of fintech companies. In my experience it’s usually better for customers to have large amounts of competing products than to be locked into a mono- or duopoly.