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Banks face new record keeping duty under UK regulator's PSD2 regime

Banks and building societies will be obliged to keep a record of the volume of account information services and payment initiation services they provide under new payment services laws due to come into force in the UK early next year, according to new proposals.14 Jul 2017

The Financial Conduct Authority (FCA) said it wants to have the possibility of requesting the data from the credit institutions so as to gain "a complete view of the market".

"Our record keeping proposal is designed to help us understand how competition in the account information services and payment initiation service market is working," the FCA said. "These newly regulated services could allow customers to share information about their bank accounts to improve their ability to manage their money, and increase the payment options for customers paying online products and services. This innovation and competition could contribute to growth in the payment services sector and in turn the UK’s economy."

The regulator outlined the type of information the firms will be required to record in a new consultation paper (161-page / 2.37MB PDF) that addresses its plans to implement aspects of the EU's updated Payment Services Directive (PSD2).

"We propose that credit institutions be required to keep records on the following: the number of different payment accounts that the credit institution has accessed for the purposes of providing account information services; the number of customers who have used the credit institution’s account information services; the number of payment accounts that the credit institution has accessed for the purposes of providing payment initiation services; the number of payment transactions the credit institution has initiated when providing payment initiation services," the FCA said.

According to the consultation paper, four credit institutions have already told the FCA that they already hold the majority of the information that they will be required to retain under the new record keeping rule.

In its paper, the FCA also confirmed that it will change its supervision manual to require PSPs to report major operational or security incidents to it. PSPs will have to report such incidents "without undue delay". The FCA confirmed that PSPs should follow guidance produced by the European Banking Authority (EBA) on incident reporting under PSD2 to meet their regulatory obligations in the UK.

The FCA's consultation is open until 18 August.