The European Fintech Alliance has once again fired up its tussle with the financial services establishment over PSD2 by speculating that banks will rely on below par APIs in order to avert competition.
The alliance of 74 fintechs, fintech associations and challenger banks shows its distrust, as the Regulatory Technical Standards on secure communication and strong customer authentication under PSD2 possibly assist banks to stay exempted by their National Competent Authority from accommodating a licensed Third Party Payment Services Providers (TPPs) to access accounts through a fallback option when an API malfunctions.
“This is indeed a novel approach – we are not aware of any other case when new competitors in an industry have been obliged to rely on a specific API controlled by the incumbents,” a statement reveals.
This latest memo is associated with an enduring struggle between the fintechs and banks with reference to the shape of PSD2. The whole thing started last year when screen scraping for bank-led access to client’s data under APIs was outlawed by the authorities.
The alliance clarifies its fear regarding deliberate acts of banks to lower the functionalities and information available in their APIs with a view to thwarting the TPPs.
Keeping this factor in mind, the alliance further says that “the ECB, EBA, and EC are under a “heavy responsibility” to make sure that any API provided by banks should work in practice and offer adequate functionalities along with performance, if their ultimate goal is to meet the objectives of PSD2”.
The alliance has chalked out the key API requirements in four areas: information, authentication, consent management, and performance.