Data, Innovation and Competition in Finance: The Case of the Access to Account Rule

Abstract

Technological innovation can foster competition within the retail financial sector. However, in order to pave the way for the emergence of FinTech with the goal of promoting innovation and competition, policymakers need to address a data bottleneck problem. The access to account (XS2A) rule introduced by the revised EU Payment Service Directive (PSD2) is worth of attention as it mandates banks to provide access to customer account data to all authorized third payment service providers. If properly implemented, the XS2A rule may unlock competition in retail financial markets by mitigating consumer disengagement and information asymmetry problems that have traditionally affected retail financial markets. In this respect, as showed by the UK Open Banking experience, supervised application programming interfaces (APIs) standardization is crucial to deliver adequate levels of interoperability. FinTech, PSD2, payment services, access to account rule, big data, open banking, API, competition law, BigTech, standardization