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FDATA responds to EBA consultation

The Financial Data and Technology Association has responded to the European Banking Authority’s consultation on authorisation and registration under PSD2.

The responses (submitted online) are:

Q1: Do you consider the objectives of the Guidelines as identified by the EBA to be plausible and complete? If not, please provide your reasoning.

FDATA considers the objectives to be plausible and almost complete. Our key concern, though, is to ensure that smaller applicants providing narrower services are not subject to the same requirements as large multi-state applicants with broad services. An adjustable, tiered system would be preferable to facilitate this.

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Q2: Do you agree with the options the EBA has chosen regarding the identification of payment services by the applicant; the way information is to be submitted to the competent authority; the four-part structure of the Guidelines, and the inclusion of authorisation for electronic money institutions? If not, please provide your reasoning.

FDATA has no objections to these chosen options. However, we would ask you to clarify the process for an applicant with multiple lines of business.

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Q3: Do you consider it helpful how the EBA has incorporated proportionality measures in the Guidelines in line with PSD2? If not, please explain your reasoning and propose alternative approaches.

FDATA does consider this helpful and has no specific objection. In general terms, however, we would ask the EBA to constantly assess whether barriers to entry are too high and may stifle innovation. Would the EBA consider an exemption for some applicants under defined conditions?

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Q4: Do you agree with the Guidelines on information required from applicants for the authorisation as payment institutions for the provision of services 1-8 of Annex I of PSD2, as set out in chapter 4.1? If not, please provide your reasoning.

Please treat this answer as a catch-all for questions 4, 5 and 6.

Again, FDATA’s key concern here is the potential stifling of innovation which would result from barriers to entry for early-stage applicants. In this respect, the requirements around business plans, marketing and forecasting seem overly onerous.

Secondly, some of the information required appears too granular and technical in nature and lacks focus on the more important issue of the quality of an applicant’s information security management system.

Furthermore, for applicants with dynamic, cloud-based systems, some of the information requested is likely to change on a regular basis. We would ask the EBA to clarify whether notification of every change would be required.

In all these cases, it is possible to be more selective in the information required and still ensure that the approval process ensures only well-qualified applicants.

Finally, we would ask the EBA to clarify why ISO27001 has not been recommended as a standard to apply, having been mentioned in the Regulatory Technical Standards and recommended by the UK’s Open Banking Standard.  Adoption of this would reduce the workload on competent authorities.

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Q5: Do you agree with the Guidelines on information required from applicants for registration for the provision of only service 8 of Annex I PSD2 (account information services), as set out in chapter 4.2? If not, please provide your reasoning.

See answer 4.

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Q6: Do you agree with the Guidelines on information requirements for applicants for authorisation as electronic money institutions, as set out in chapter 4.3? If not, please provide your reasoning.

See answer 4.

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Q7: Do you consider the Guidelines regarding the assessment of completeness of the application, as set out in chapter 4.4 to be helpful? If not, please provide your reasoning.

FDATA would recommend an addition. We would ask the EBA to explicitly state how long an incomplete application can wait before it is invalidated, after which a new application will be required.

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FDATA responds to CMA order on open banking

The Financial Data and Technology Association (FDATA) has responded to the CMA’s draft order following its publication of the retail banking investigation, which led to the creation of the Implementation Entity.

Commenting on the submission, which can be read here, FDATA’s Executive Director Andy Maciver said:

“FDATA’s interpretation of the purpose of this order is that it should reflect the letter and spirit of the CMA’s final Retail Banking Investigation report. In that sense, we are broadly satisfied that this Order achieves its purpose.

“However, in our response we have taken the opportunity to make a series of general points which we believe are critical to the successful delivery of ‘open banking’, surrounding three areas: the ‘live market’ for fintech, the market for cyber-insurance and the need for a public awareness programme.”

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FDATA Chairman named Fintech convener

Gavin Littlejohn, Chairman of the Financial Data and Technology Association, has been named by the Implementation Entity as the Convener of its Advisory Group on Fintech, and a result will take a seat on the body’s Steering Committee.

The Implementation Entity is the group tasked by the Competition and Markets Authority with delivering an open banking API for the UK.

In addition to Gavin’s appointment, Ian Major from Runpath (an FDATA founding member), has been named as the Convener of the Third Parties advisory group, covering price comparison websites and credit reference agencies.

Other appointments include Thaer Sabri of the Electronic Money Association to convene the Payments group and James Whittle of Payments UK to convene the PSD2 group, both of which FDATA will seek involvement in. The convener of one Advisory Group – that of Challenger Banks – is still to be named, and FDATA is assisting in that process.

Commenting, FDATA’s Executive Director Andy Maciver said:

“We are delighted that FDATA’s members and those close to FDATA have been appointed to these positions. We are perfectly placed to serve our members’ interests by influencing the direction of the API and ensuring that it delivers the enormous benefits to the consumer which were envisaged when HM Treasury started this process in 2015.”

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FDATA responds to EBA insurance consultation

The Financial Data and Technology Association has submitted a response to the EBA consultation “Guidelines on the criteria on how to stipulate the minimum montary amount of the professional indemnity insurance under PSD2”.

There were seven questions, which can be seen below along with FDATA’s answers:

Question 1: Do you agree with the requirement that competent authorities require undertakings to review, and if necessary re-calculate, the minimum monetary amount of the PII or comparable guarantee, and that they do so at least on an annual basis, as proposed in Guideline 8?

FDATA agrees with the principle behind this proposal. It is good for all market participants that operators are adequately insured, and we support the concept of competent authorities being in control of that regime.

However we would stress the need to minimise the administrative burden on the operators, especially in the case of start-ups who have little resource for such tasks. If the administrative burden is significant it could be seen as a barrier to entry to the market.

Question 2: Do you agree with the formula to be used by competent authorities when calculating the minimum monetary amount of the PII or comparable guarantee as proposed in Guideline 3? Please explain your reasoning

We have applied the proposed formula to some theoretical companies of different sizes, and we believe that the financial outcome tends to be fair. However whilst the outcome seems reasonable, we have concerns that the formula itself is overly complicated.

We would therefore encourage more work to investigate whether the same equitable outcome could be achieved through a less complicated formula.

Question 3: Do you agree with the indicators under the risk profile criterion and how these should be calculated, as proposed in Guideline 5? Please explain your reasoning.

As we noted in answer to question two, we generally support the indicators and the result they produce. However we are concerned that some companies, start-ups in particular, will find the system onerous and complicated. The EBA needs to be satisfied that a similar outcome cannot be achieved through a less complicated formula.

Question 4: Do you agree how the indicators under the type of activity criterion should be calculated, as proposed in Guideline 6? Please explain your reasoning.

See answer to question 3.

Question 5: Do you agree how the indicators under the size of activity criterion should be calculated, as proposed in Guideline 7? ? Please explain your reasoning

See answer to question 3.

Question 6: Do you think the EBA should consider any other criteria and/or indicators to ensure that the minimum amount is adequate to cover the potential liabilities of PISPs/AISPs in accordance with the Directive? Please explain your reasoning.

We do not believe the EBA need consider any other criteria or indicators to set a minimum amount, however we would encourage the EBA to consider criteria which would enable the setting of a maximum amount of adequate cover.

Question 7: Do you have any other comments or suggestions that you think the EBA should consider in order to ensure that the minimum amount is adequate to cover the potential liabilities of PISPs/AISPs in accordance with the Directive? Please explain your reasoning.

We believe that it is important that the EBA consults with the insurance industry to ensure that the calculations correspond with the current insurance industry assessment of risk for AISPs and PISPs.

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FDATA ANNOUNCES ADDITION OF CALLCREDIT AS IMPLEMENTATION ENTITY GETS UNDERWAY

The Financial Data and Technology Association (FDATA) has announced another new member, with the addition of the UK’s second largest credit reference agency and consumer data manager Callcredit Information Group.

FDATA’s members provide innovative financial applications and services to empower customers to make better decisions and take fuller control of their financial lives across all their accounts, credit cards, loans and investments.

Commenting, FDATA’s Executive Director Andy Maciver said:

“The addition of Callcredit to FDATA’s membership is a hugely significant moment for our Association. In addition to members from other areas of the fintech industry such as personal finance management and challenger banking, we now have the majority of the credit reference industry in the membership.

“As we commence the working of the Implementation Entity, we enter a critical phase for open banking. Callcredit’s considerable expertise will be invaluable in helping FDATA navigate its way through the process.”

Commenting, Mark Davison, Chief Data Officer at Callcredit, said:

“The industrial marketplace we see is facing change on an unprecedented scale.  The access to data, driven in many cases by changes to regulation, is empowering consumers more than ever.   Callcredit is at the forefront of development within this second digital revolution.  

We’re excited to join FDATA and work alongside member companies to help consumers make better financial decisions, and empower them to tame the increasingly daunting task of managing all their personal data.

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Another four start-ups join FDATA

The Financial Data and Technology Association has announced another four new start-ups have joined its growing membership ahead of the formal commencement of the Implementation Entity’s work on delivering an API.

The companies – Castlight Financial, PayLink, RentData and Truelayer – provide innovative financial applications and services to empower customers to make better decisions

FDATA’s members are united by a desire to see a quality API implemented in as fast a timescale as possible, encompassing as much financial data as possible, and the Association is committed to helping the Implementation Entity achieve this.

Andy Maciver, FDATA’s Executive Director, said:

“FDATA’s membership has now doubled since the summer. We believe we are the premier Association to represent the needs of the fintech sector as we navigate what could be a game-changer for the way the consumers of the UK manage their data and their money.

“We must get it right, and FDATA is there to ensure that we do.

“Our four new members – all innovative start-ups pushing forward exciting business plans – will help ensure that as an Association we represent all views and, crucially, interrogate all proposals to ensure that they are in the best interests of the consumer.”

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FDATA welcomes first bank to its membership

The Financial Data and Technology Association (FDATA) has announced that Sainsbury’s Bank has joined as a member. Sainsbury’s Bank is the first bank to join FDATA, and takes its total number of members to 14 at a critical time for the implementation of open banking.

Sainsbury’s Bank was the first supermarket bank to be established in the UK, and provides loans, credit cards, insurance products, savings accounts, and travel money.

FDATA’s members provide innovative financial applications and services to empower customers to make better decisions and take fuller control of their financial lives across all their accounts, credit cards, loans and investments.

Commenting, Andy Maciver, FDATA’s Executive Director, said:

“This is a great development for FDATA, as we welcome our first challenger bank into the membership. This shows the breadth of FDATA’s membership, which as well as Sainsbury’s Bank now includes personal finance management platforms, credit reference agencies, accountancy providers and lenders, amongst other industries.

“We are entering a crucial time for the creation of an open banking regime and the implementation of an API. Sainsbury’s Bank is a forward-thinking bank that puts its customers at the heart of everything it does and making the right decisions for its customers is a key part of this. We are delighted to have their influence and expertise as part of our membership.”

Sainsbury’s Bank Chief Customer Officer David Jones said:

“We are looking forward to engaging with the FDATA members and their stakeholders and ensuring we stay well-informed and well-positioned to look after the needs of Sainsbury’s customers in the ever-changing world of digital and data management.”

Link to Sainsbury’s Bank

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FreeAgent becomes 13th member of FDATA

FreeAgent, one of the leading online accountancy software providers, has become the 13th company to join the Financial Data and Technology Association (FDATA).

FDATA’s members provide innovative financial applications and services to empower customers to make better decisions and take fuller control of their financial lives across all their accounts, credit cards, loans and investments, and it is currently fully engaged in the process of creating an API as mandated by the CMA.

FreeAgent, in common with all of FDATA’s members, will be able to use an API to improve the way it services its customers, and with its added weight behind FDATA the trade assocation will continue to push for a fuller, faster open banking regime to be in place.

Commenting, FDATA’s Executive Director Andy Maciver said:

“FreeAgent is one of the most respected operators in the online accounting space, and it is a huge coup for FDATA to have them on board as a member. We are entering a hugely important phase, and with more members joining FDATA on a regular basis we can increasingly speak for the widest spectrum of the fintech industry as we push towards the API era.”

Ed Molyneux, CEO and co-founder of FreeAgent, said:
“We are delighted to join FDATA, as we firmly believe that opening up Britain’s financial sector to financial data and technology will be hugely beneficial for millions of freelancers and small business owners across the country.


“With the government aiming to implement its Making Tax Digital strategy over the coming years, small business owners require better access than ever to their financial data – and need to be able to seamlessly feed it into the multitude of apps and online software that they use to manage their daily business admin.”

Link to FreeAgent

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