Technology companies that offer digital payment services should see the same level of regulation as banks, the British Bankers Association said on Tuesday, in a move to protect consumers.
A report by the BBA and management consultants Accenture said that the digital payments revolution will be just as challenging for regulators as for banks, who will need to ensure that digital services “do not damage consumer protection, the fight against crime or financial stability by squeezing misconduct or prudential risk out of the regulated banking sector into the non-regulated digital sector”.
Apple is expected to roll out Apple Pay in the UK in 2015, while Google announced in January that UK Google Wallet users will now be able to send funds over Gmail. Facebook also announced last week that it will allow users of its messenger app to send and receive funds. Facebook’s payment service is currently only available in the US.
British consumers are increasing their use of mobile banking as high street banks close branches. The proportion of bank customers using mobile devices to bank online rose to 27 per cent last year from 8 percent in 2010, with customers of major British banks now transferring more than 1.7 billion pounds ($2.5 billion) a week via mobile devices.
“More choice is good news for all, but it’s vital that regulators provide a level playing field, giving customers the same robust protection wherever they choose to bank,” BBA Chief Executive Anthony Browne told Reuters.
“This is a tipping point for the banking world,” he added. “On the one hand, this is a time of great opportunity for our industry, as new types of technology allow us to serve our customers better and more efficiently than ever before. But the change poses challenges, too.”
Despite the data protection regulation being implemented in 2018, 69% of IT decision makers don’t have the backing of their board to achieve GDPR compliance, according to Calligo.
The majority of the region’s 28 member states report that the situation has worsened over the past year, reports business management consultant Verisk Maplecroft.
Regulators in the UK, the US and Hong Kong instituted proceedings against more than 1,700 individuals last year, or four times the number of cases brought against companies.
The US Commodity Futures Trading Commission approved LedgerX as the first regulated clearing house for derivatives contracts settling in digital currencies.