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The buy now, pay later (BNPL) giant has called the new legislation an opportunity for the EU to “get it right”, but warns that proposals to introduce charges is not the right way forward.
The EU’s hotly anticipated framework for financial data access has now been published by the European Commission.
This proposal establishes clear rights and obligations to manage customer data sharing in the financial sector beyond payment accounts.
Among its objectives, the proposal outlines the possibility for customers to share their data with data users, such as financial institutions and fintech firms, in a secure and machine-readable format.
It will allow customers to receive new, cheaper and better data-driven financial and information products and services, such as financial product comparison tools and personalised online advice.
This echoes what has been enabled through open banking in the revised Payment Services Directive (PSD2), but goes one step further in one significant aspect.
The commission has confirmed that, unlike PSD2, data access will come at a premium and this has drawn the ire of one of the EU’s biggest fintechs — Klarna.
“The Financial Data Access Proposal's provision allowing banks to charge for accessing consumer data is outrageous. Personal data belongs to individuals, not banks' profit margins. It's time to prioritise consumer rights over banks' greed and ensure a level playing field.”
In a blogpost, the Swedish firm said that the EU “must not succumb to big bank lobbying”.
“The proposal announced today to allow banks to charge for access to their customer’s data looks very much like the EU has prioritised pleasing big banks over putting consumers' best interests at heart,” the blog post continued.
Klarna argued that it is essential that consumers have control over their personal data ,adding that it should not be exploited for financial gain.
“The Financial Data Access Proposal's provision allowing banks to charge for accessing consumer data raises serious concerns about who really owns the data, if banks are allowed to be compensated for providing access to it,” Klarna said.
According to the firm, which said last month that it expects to be profitable again by the end of the year, data should not be a commodity that is monetised by big banks.
“If financial data is to be truly open then it must also be free to access. This is, after all, the customer’s data, not the banks,” the company said
Klarna advocates for data mobility, free of charge and easily done, becoming readily available for all consumers.
“We believe this should be the core of the revision, enabling much needed new and innovative services to deliver the best outcomes for consumers and society, and bringing healthy competition to traditional banks in Europe.”
Regardless of Klarna’s critique, the decision to allow charges should not come as a surprise to the fintech industry.
The commission suggested it as a possibility as far back as last May.
Branding the new proposals a "PSD2 reboot", the fintech giant said that the European Union has a huge opportunity to redesign a regulatory environment that enables fintechs to compete, innovate and deliver maximum value for European consumers.
“While PSD2 has certainly resulted in more secure payments, it has singally failed to deliver on the original promise of a truly open financial data market,” Klarna said. “This is because traditional banks have constantly made excuses and evaded the spirit of the regulation rather than do what’s best for their customers.”
