The European Commission has confirmed its officials carried out unannounced inspections “concerning online access to bank account information by competing service providers.” The European Commission says:
“The Commission has concerns that the companies involved and/or the associations representing them may have engaged in anti-competitive practices in breach of EU antitrust rules that prohibit cartels and restrictive business practices and/or abuse of dominant market positions…
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.”
They do not name the banks, but FT reports Poland and Netherlands are among the member states where unannounced inspections were carried out.
The inspection precedes a new EU rule that comes into force in January 2018 which compels banks to share customers data with non-banks if customers so authorize it.
Fintech providers, like ApplePay or perhaps even BitPay, can then offer payments and provide tailored services to customers. So competing with banks.
However, it appears not all banks are welcoming such competition which may allow customers to more easily switch to providers that charge less, so lowering banks’ profits. But the European Commission says no guilt is presumed:
“Unannounced inspections are a preliminary step into suspected anti-competitive practices. The fact that the Commission carries out such inspections does not mean that the companies or their associations are guilty of anti-competitive behaviour nor does it prejudge the outcome of the investigation. The Commission respects the rights of defence, in particular the right of companies to be heard in antitrust proceedings.”
Banks have been accused of anti-competitive practices by Blockchain companies in particular, who often find it difficult to open a bank account, a matter that was brought up at a European Parliament session on blockchain technology.
While in America there appears to be a tension of sorts between banks and government regulators over the Fintech charter which is now mired in legal disputes and court cases.
Acting Comptroller of the Currency Keith Noreika had some polite scathing criticisms for the Federal Deposit Insurance Corporation (FDIC), which he called a monopoly. Suggesting it limits new bank entrants to the market.
As well as the FED, which he politely sternly criticized for strictly enforcing a rule that might make fintech operations as a bank more difficult.
The fintech charter is meant to bypass both, but the Conference of State Bank Supervisors, which represents state banking regulators, has sued the Office of the Comptroller of the Currency (OCC) in the U.S. District Court of Columbia, aiming to stop the plans.
We may therefore be seeing an interesting development as governments and banks face a standoff of sorts following the crash which sent many nations to near bankruptcy.
Banks highly regulated status means competition is sparse with few new entrants, allowing them to charge as much as $30 for a missed payment.
But fintech more generally, and blockchain technology specifically, is beginning to transform finance as banks try to keep ahead of what they fear might be the next leg of disruption of the digital revolution.