US tech giants to be excluded from EU\u2019s Financial Data Access initiative, which enables the sharing of certain customer financial data<\/b>
\nUS tech giants to be excluded from EU\u2019s Financial Data Access initiative, which enables the sharing of certain customer financial data
Big Tech firms are set to be excluded from access to a European Union (EU)-wide financial data-sharing initiative, in a boost to banks battling to retain market share.
The rules, which are set to come into force soon, were designed to give third-party businesses access to financial data, to allow them to develop services for consumers.
Firms like Meta, Google and Amazon are keen to develop financial products based on data insights, and banks could be cut out if the tech firms develop and offer products and services directly to consumers.
Banks fear the Big Techs could gain significant value from the financial data they hold, at their expense, while the EU wants to protect consumers and its markets.
The Financial Times has revealed that one EU diplomat said: \u201cBig Tech players are actually losing the lobbying fight.\u201d
The European parliament and commission supported fears from banks that sensitive data could be exploited and also increase the domination of US Big Tech firms.Digital age
According to the EU Commission, FiDA is part of the EU\u2019s plan to bring \u201cthe wider financial sector into the digital age\u201d.
\u201c[FiDA] proposes a new framework for secure and open access to customer data across a wider range of financial services,\u201d it said. \u201cThis framework places consumers\u2019 interests, competition, security and trust at their centre.
The \u201cproposed framework seeks to ensure the EU\u2019s financial sector is fit for purpose and adaptive to the digital transformation, and the risks and opportunities it presents \u2013 in particular for consumers\u201d.
In a document seen by The Financial Times, Germany suggested to other EU countries that Big Tech groups be excluded, \u201cto promote the development of an EU digital financial ecosystem, guarantee a level playing field and protect the digital sovereignty of consumers\u201d.
Chris Skinner, fintech industry expert and CEO at The Finanser, said: \u201cI think the main issue the EU regulators have with Big Tech is that, if they can access the financial data of EU citizens, then it could lead to US control over them. Hence, they want to ensure our data is protected.\u201d
Even traditionally open fintech investors are beginning to worry about the EU being too malleable when it comes to regulation.Political fears
European fintech entrepreneur Matthias Kr\u00f6ner said that in the \u201cold days\u201d, he would have been open to granting access to this data to big tech companies, \u201cbut probably not in today\u2019s political environment\u201d.
\u201cWe currently see strong regulatory competition: while the US is unleashing big tech, the European commission needs to protect our standards,\u201d he told Computer Weekly.
Kr\u00f6ner added that the big tech firms only support EU regulations when it suits them. \u201cNaturally, they would love to pick and choose the rules they support or not,\u201d he said.
\u201cEuropean regulation might not be everybody\u2019s darling, but first of all it is made to protect the people, it\u2019s not made because the EU is an autocratic state,\u201d added Kr\u00f6ner. \u201cAnd Europe is under increasing pressure for exactly that.\u201d
He said that there is currently a higher-than-ever alert level because \u201cwe are also living in the era of AI\u201d.<\/p>\n