Open banking: fintechs react to FBF attacks

In a recent interview with Les Echos, the new chairman of the French Banking Federation (FBF) denounced open banking. Annoyed, fintechs react in an article published by the France Fintech association.

The risk of "vaporizing" banking data

On September 28, the daily Les Echos published an interview with Nicolas Théry, the new chairman of the French Banking Federation. " I don't believe in open banking ", he said in the interview, asserting that " regulation can sometimes be absurd ".

This regulation to which Nicolas Théry refers is none other than the second European Payment Services Directive (PSD2), in force since 2018. It requires banks to share their customers' banking data - where consent is given - with non-bank players, notably fintechs.

The use of APIs, i.e. programming interfaces, enables these third-party developers to develop innovative services and applications, based on the transmission of this banking data.

In this interview, the FBF Chairman expressed his fear of " vaporization of customer data ", before adding: " The demand for confidentiality and digital privacy is non-negotiable. Banking data should be inalienable ".

Banks and fintechs, a necessary collaboration to counter the GAFAs

Nicolas Théry's comments did not go unnoticed, and fintechs were quick to react and denounce the banks' attacks on open banking, in an article published on September 30 on the France Fintech association website.

" These comments take us back several years," they assert, since they constitute, in their view, a challenge to DSPD2, which, although it only came into force in 2018, was adopted as early as 2013.

Interviewed by Maddyness, the founder and chairman of France Fintech, Alain Clot, considers that Nicolas Théry " has pushed the envelope very far, in contradiction with his members ", many banking industry leaders being in favor of open banking.

In its statement, France Fintech stresses that the " dissemination of customer bank account history data " is a concern shared by fintechs, and points out that they are " regulated and supervised by the same regulators and supervisors as banks ", namely the Autorité de contrôle prudentiel et de résolution (ACPR), the Commission nationale de l'informatique et des libertés (CNIL) and the Autorité des marchés financiers (AMF).

The fintechs point out that " the data associated with a customer belongs neither to the bank nor to the fintech, but to the customer himself ", who is therefore free to share it with a service provider with a view to obtaining new services.

Finally, for France Fintech, collaboration between fintechs and banks is essential to " counter the growing offensive in financial services by Big Tech (American GAFAM and Chinese BATX) which, through intensive exploitation of data, often know their users better than banks know their customers ".