Remarks by Executive Vice-President Dombrovskis and Commissioner McGuinness on financial data access and payments

Remarks by Executive Vice-President Dombrovskis

Digital technologies have transformed people's habits and behaviour for a long time.

This is also true in the financial sector. People and businesses are keen to access new online services. And providers are looking for innovative and better ways to supply them.

For this, the key element is data – and access to it.

Today's proposals form part of our strategy to boost the data economy by making the most of opportunities that data-driven innovation can offer in the financial sector.

For example, we can do more to promote data sharing in digital finance. We want to give people and companies more control over what can be done with their data when it is used – and who can access it.

At present, they cannot properly control access and sharing of their data beyond payment accounts.

This means that they do not have widespread access to data-driven financial services and products.

In addition, they are often reluctant to share their data because they do not trust that the risks are properly addressed.

This is why we need clear EU-wide rules to govern data sharing, allowing people to access tailored products and services that:

  • suit their specific needs
  • give them more choice
  • boost product innovation.

Our proposal aims to enable data sharing and third-party access for a wide range of financial sectors and products: a concept known as open finance.

It lays down requirements for data users, meaning companies that want to access customer data and to provide innovative services. It also lays down requirements for data holders, meaning financial institutions that collect, store and process customer data.

Those companies which access data to provide customers with innovative services will be regulated and supervised.

In expanding access to data, we must strike the right balance between promoting innovation and managing risks to customers.

This means preserving high privacy, security and ethical standards. And above all, financial data sharing must be based on customer permission.

Customers who wish to share their financial data should be able to decide how - and by whom – it is used.

If they choose to proceed, they should have an option to allow firms access to their data as a way to receive offers of better and cheaper financial products and services.

Data holders will have to provide their customers with a user-friendly dashboard showing the financial data that they may choose to share, and which gives them permission to do so.

For example, users accessing a wider set of data could offer more personalised insurance to those customers. They could give customers a better overview of their personal finances.

Some areas will be excluded, such as data related to sickness and health insurance, to certain life insurance products and to data collected as part of a creditworthiness assessment.

But it is not only individual consumers who will gain from increased data-sharing.

Companies, especially SMEs, will also enjoy wider access to financial products and services.  For example, open finance could speed up the reply to a small business making a loan application – by sharing its financial data with a bank.

Financial institutions will be able to take full advantage of digital transformation trends. Fintech companies can make the most of new opportunities in data-driven innovation.

Let me now turn to today's other proposals, which concern amending the rules for retail payment services – specifically, the second Payment Services Directive.

Overall, it is working well.

So we are not advocating major changes.

But still, there have been many changes in the payment services market over the last years.

Our proposals are more of an evolution than a revolution.

However, we do want to:

  • reinforce consumer protection even more, also in cases of fraud
  • make sure that the EU payments market keeps functioning smoothly in light of new technologies
  • strengthen enforcement of the rules across the EU
  • boost opportunities for non-bank payment service providers by allowing them access to all EU payment systems, with appropriate safeguards in place.

Take open banking, where customers choose to share their payment account data with other providers.

Despite solid growth since 2018, with hundreds of new non-bank providers emerging to service millions of clients, there has been mixed success in uptake of open banking services.

We aim to boost their competitiveness – and Mairead will give you more details on all of this.

I will conclude here and pass the floor to her. Thank you.

Remarks by Commissioner McGuinness

Thank you, Valdis. Good afternoon colleagues.

Essentially this package is about putting innovation at the service of consumers.

We are offering more choice and more tailored products, and this is down to as Valdis said sharing of information – but really important also who controls the information is in our hand as consumers.

And we are strengthening consumer protection.

So briefly on the revision of the Payment Services Directive.

We are strengthening protections against payment fraud, and if I ask this audience, I'm sure many of you, or all of you will probably put your hand up if I asked how many text messages or fraudulent emails have you received. It's commonplace and it is alarming the number of people who are scammed money and have problems as a result.

So firstly, we are extending what is already included in our instant payments proposal to all credit transfers – namely that there is a check between the bank account number and the name of the account.

Secondly, by introducing a new right to a refund to consumers who are victims of certain types of fraud like spoofing – and this is where the fraudster pretends to be a bank employee, and indeed it looks like they are, but obviously they are in fraudulent mode, and consumers get tricked into transferring money to them.

Meanwhile, payment service providers will gain a legal basis allowing them to voluntarily share data on payment fraud. This is something the industry wants, and we believe that sharing that information will allow us be better when it comes to tackling fraud.

We are also helping to level the playing field among old and new market participants in payment systems.

On Open Banking, we know that it didn't reach its full potential, so we're again addressing the barriers that we've identified.

Like common rules on interfaces for data sharing.

And that brings me to the second part and briefly, our proposal on Financial Data Access.

Because Open Banking allowed customers to decide to share their payment account data from a bank to another financial provider.

This Financial Data Access proposal will expand that – you will be able to decide to share a wider range of financial data.

So that might be around investments or pensions.

And that would allow customers – both businesses and individuals – to get more access to better and more tailored products and services.

And Valdis has mentioned the SME possibilities here.

And, again, we are putting strong customer protection in place.

Because we want customers to be able to control their financial data.

So they will have access to this permission dashboard –giving them an overview of information they've shared and who they've actually shared it with, and that will be visible and transparent.

We have also made sure, and I think it's an important point to repeat, that some data will not be permitted to be shared – and here we look at life insurance and health insurance.

Companies that are allowed to access financial data will also be regulated and supervised.

And this proposal is also about enabling innovation with data.

We want to enable financial companies to share and re-use data, subject to the protections I've just mentioned.

But we also want providers to be able to offer more tailored and personalised products.

So our proposal sets out the goals around standardising interfaces and data, which is necessary to allow data to be easily shared.

And the standardisation itself will be led by the financial sector, based on the goals we've set out.

So very briefly today we are embracing all of the possibilities offered by innovation and data.

But – and it is an important reminder – we are also making sure that this is centred on the consumer.

Consumers will benefit from stronger protections, particularly against fraud.

And consumers will keep control over their data.

Thank you.