EU probes bank industry as firms gird for data-sharing law

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(Bloomberg) -- As the European Union prepares to usher in sweeping new data-sharing rules for finance, antitrust authorities are probing whether the banking industry is preventing rival services from accessing customers’ accounts.

EU officials carried out unannounced inspections on Oct. 3 in “a few” countries amid suspicions that “companies involved and/or banking associations representing them” may have thwarted non-bank services, the European Commission said on Friday. The Dutch Banking Association, the Dutch Payments Association and the Polish Banking Association confirmed that inspectors sought information from their organizations.

"These alleged anti-competitive practices are aimed at excluding non-bank owned providers of financial services by preventing them from gaining access to bank customers’ account data, despite the fact that the respective customers have given their consent to such access," the commission said in its statement.

The inspections come as the bloc’s retail banking industry is being reshaped by financial technology firms offering a range of apps and services to consumers, often via their smartphones. Lawmakers in Brussels have supported innovation as a way to provide consumers with more choices in financial services.

Beginning in January, virtually every lender in the bloc will have to provide outside firms with regular access to their customer accounts and data under a law known as the Payment Services Directive 2, or PSD2. The legislation is designed to help challenger banks, fintech startups, as well as tech giants like Apple Inc. and Google, compete with traditional lenders and payment processing firms.

Expensive Changes

Some banking groups have complained that data-sharing will force them to make expensive changes to their information technology systems and help rivals pick off their customers. The commission said it conducted the inspections with officials from national competition authorities.

The Dutch Payments Association said the probe examined its role in the "alleged shielding by Dutch banks of their payment accounts for access by third parties," an investigation that’s being carried out in several EU countries, according to a statement on its website.

It said it will fully cooperate with the EU and "is confident in the outcome of the investigation."

Krzysztof Pietraszkiewicz, head of the Polish Banks Association, said the industry is cooperating with regulators and takes the issue of data-sharing seriously.

The “Polish banking system is technically advanced, friendly and open, but it is also very well secured,” he said in an interview. “Giving access to clients’ credentials to third parties requires diligence and we won’t accept any shortcut solutions that would harm the safety of their deposits. For us security is a priority.”

--With assistance from Marta Waldoch and Joost Akkermans

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