The UK Financial Services Authority yesterday gave regulatory
clearance to on-line account aggregation services that enable
consumers to view all their on-line accounts on a single web page.
Speaking at a conference in London today, FSA Managing Director
Phillip Thorpe said:
"These services enable consumers to view any
number of on-line accounts - from bank accounts to reward schemes
such as airmiles - in a single location on the web. Many types of
firm, such as banks and internet portals, could potentially provide
an aggregation service and it is known that several firms are
planning to launch services in the UK. We therefore feel it is
important to set out the regulatory position now.
"The key message for consumers is that the
FSA will have no powers to regulate the provision of account
aggregation. This activity will fall outside the jurisdiction of
the FSA and, as a result, we cannot guarantee you the protection of
the regulatory system if something should go wrong. While we can
see the attraction in using the services of an aggregator, it is
important that you weigh up the risks involved too."
The FSA expects firms that it already regulates to undertake
proper checks before offering such services, particularly in
relation to legal, security and systems and controls issues and to
meet certain minimum standards. They should not, for example, base
a business model on any activity which they have been advised is a
breach of the criminal law, regardless of the likelihood of
prosecution.
For unregulated firms, there will be no requirement to obtain
authorisation from the FSA prior to offering aggregation services
in the UK. However, firms offering account aggregation that wish to
provide additional services, such as investment advice, dealing
facilities or arranging deals, may require authorisation from the
FSA for these additional activities.
The FSA advises consumers, before giving their passwords to an
aggregator, to consider the following:
- If I give an aggregator my passwords, will I break the terms
and conditions of my on-line account? If so, you could be liable
for errors or frauds on your account, however they occur. Check
with the firm where you hold your on-line accounts.
- How will the aggregator use information about me? It could be
sold on to other firms for marketing purposes. Check the
aggregator's privacy policy before you join.
- What will happen if things go wrong? Check with the aggregator
and your firm about what they'll do to sort out any problems that
do arise. You may not have access to the Financial Ombudsman Scheme
or the Financial Services Compensation Scheme.
