Banks call for crackdown on Apple use of spending data
BANKS have called for a crackdown on Apple over claims its access to iphone payments will give it an unfair advantage as it pushes into finance.
The Financial Conduct Authority’s (FCA) Practitioner Panel, consisting of bank and insurance executives, has written to the regulator saying there are “multiple imbalances” in how tech giants can gather and use consumer spending data.
The letter, signed by Barclays’ UK chief executive Matt Hammerstein, specifically references Apple and Amazon, warning that there is a “pressing need” to address their access to data.
It says that Apple, which allows customers to connect their bank accounts to their iphone’s Wallet app, will account for the majority of activity in open banking – a system paid for by major banks – by the end of this year. It also raises concerns over Amazon and how its data on shopping habits could also give the company an advantage.
The letter said: “The ability of big tech to access private and public retail data and combine it with AI and advanced analytics may create the conditions for market dominance.
“While we have no doubt that big tech often does deliver good experiences and outcomes for their customers, they are under no obligation to do so, let alone demonstrate that, while big tech obtains these data privileges for free and have no obligations on how it is used.”
The FCA is investigating if big tech enjoys unfair access to customers’ data in a way that could make them dominant in the market. It expects to report on a “call for input” by the summer.
Last year, Apple began allowing iphone users to see their bank account transactions and balances through the Wallet app, taking advantage of the open banking protocol pushed through by regulators that allows bank accounts to be linked to other apps.
The Practitioner Panel is chaired by Mr Hammerstein and includes representatives from Lloyds, Nationwide, KPMG, Vanguard, Aquis Exchange, UBS, Natwest, Admiral, Rathbones and digital bank Chetwood.
An FCA spokesman said: “Their [big tech] unique access to large sets of data, such as retail, could give them an advantage in the future if combined with financial data that firms already hold.”
A Barclays spokesman said Mr Hammerstein had signed the letter in an independent capacity and that the letter represented the views of the panel.
Apple said it does not use Apple Pay data to build profiles on users and transaction information is stored on users’ devices, not the company’s servers.