PSD2 – the EBA’s wise decision to reject Commission amendments on screen scraping

In a response to the EC Commission, the EBA (European Banking Authority) rejected amendments on screen scraping in the PSD2 regulation (Revised Payment Services Directive) that had been pushed by several FInTechs. While it is still the Commission’s place to make the final decision, the statement of the EBA is clear. I fully support the position of the EBA: Screen scraping should be banned in future.

In a “manifesto”, 72 FinTechs had responded to the PSD2 RTS (Regulatory Technical Standards), focusing on the ban of screen scraping or as they named it, “direct access”. In other comments from that FinTech lobby, we can find statements such as “… sharing login details … is perfectly secure”. Nothing could be more wrong. Sharing login details with whomever never ever is perfectly secure.

Screen scraping involves sharing credentials and providing full access to financing services such as online banking to the FinTechs using these technologies. This concept is not new. It is widely used in such FinTech services because there has been a gap in APIs until now. PSD2 will change that, even while we might not end with a standardized API as quickly as we should.

But what is the reasoning of the FinTechs in insisting on screen scraping? The main arguments are that screen scraping is well-established and works well – and that it is secure. The latter obviously is wrong – neither sharing credentials nor injecting credentials into websites can earnestly be considered a secure approach. The other argument, screen scraping being something that works well, also is fundamentally wrong. Screen scraping relies on the target website or application to always have the same structure. Once it changes, the applications (in that case FinTech) accessing these services and websites must be changed as well. Such changes on the target systems might happen without prior notice.

I see two other arguments that FinTech lobby does not raise. One is about liability issues. If a customer gives his credentials to someone else, this is a fundamentally different situation regarding liability then in the structured access via APIs. Just read the terms and conditions of your bank regarding online banking.

The other argument is about limitations. PSD2 request providing APIs for AISP (Account Information Service Providers) and PISP (Payment Initiation Service Providers) – but only for these services. Thus, APIs might be more restrictive than screen scraping.

However, the EBA has very good arguments in favor of getting rid of screen scraping. One of the main targets of PSD2 is a better protection of customers in using online services. That is best achieved by a well-thought-out combination of SCA (Strong Customer Authentication) and defined, limited interfaces for TPPs (Third Party Providers) such as the FinTechs.

Clearly, this means a change for both the technical implementations of FinTech services that rely on screen scraping as, potentially, for the business models and the capabilities provided by these services. When looking at technical implementations, even while there is not yet an established standard API supported by all players, working with APIs is straightforward and far simpler than screen scraping ever can be. If there is not a standard API, work with a layered approach which maps your own, FinTech-internal, API layer to the various variants of the banks out there. There will not be that many variants, because the AISP and PISP services are defined.

Authentication and authorization can be done far better and more convenient to the customer if they are implemented from a customer perspective – I just recently wrote about this.

Yes, that means changes and even restrictions for the FinTechs. But there are good reasons for doing so. EBA is right on their position on screen scraping and hopefully, the EC Commission will finally share the EBA view.

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