Major banks have demanded a crackdown against Apple, claiming that the tech giant has access to the transactions of millions of iPhone users. This will give Apple an unfair advantage in its push into financial services.
The Financial Conduct Authority’s Practitioner Panel (FCA), which is made up of bankers and insurance executives has written a letter to the regulator stating that there are “multiple inequalities” regarding how tech giants gather and use data on consumer spending.
The letter was signed by Barclays UK’s chief executive Matt Hammerstein and specifically mentions Apple and Amazon. It warns that there is an “urgent need” to address the access of data to these companies.
Apple’s Wallet App, which lets customers connect their bank account to their iPhone, is expected to be the main provider of open banking – a system that major banks pay for – by the end this year.
Amazon is also a concern, as its data about shopping habits and the wealth of information it has could give them an edge.
The letter stated that “consistent access to data across competitors is crucial for fairness on the market.” The letter said that the ability of big technology to combine private and public retail information with AI and advanced analysis may create conditions for market dominance.
Big tech is free to use these data privileges and has no obligations as to how they are used.
The FCA investigates whether large tech companies have unfair access to customer data that could lead them to dominate the market. The FCA expects to make a report by summer on the “call for feedback”.
Apple started allowing iPhone users last year to view their bank account balances and transactions through the Wallet application, taking advantage the open banking protocol pushed by regulators, which allows bank accounts be linked to other applications.
This came after the company purchased UK fintech startup Credit Kudos in 2022 for an estimated $150m (£119m).
Open Banking Access requires FCA authorisation.
Apple Pay, the contactless payment system from the tech giant, is available in Britain since 2015. It has been pushing heavily into financial services in the US, offering credit cards, savings accounts, and buy-now, pay-later services.
Uncertain if the company intends to bring them to the UK, but banks are said to be worried that their potential access to data might give it an edge if they chose to.
In its letter, the Practitioner Panel suggests that the FCA might bring payment systems of tech companies under regulation by financial services or limit which data big tech firms could use to launch finance products.
The panel, which is headed by Mr Hammerstein, includes representatives of Lloyds, Nationwide Bank, KPMG Aquis Exchange UBS NatWest Admiral Rathbones Chetwood and Vanguard.
A spokesman for the FCA said: “Big Tech firms have the ability to boost innovation in the financial services, but their unique access large sets of data such as retail and social media could give them an edge in the future when combined with financial data already held by firms.
“That’s the reason we launched an open call for feedback to better understand how these data and access advanced technology could impact consumers and businesses.
“We are establishing standards for third-party critical services such as cloud or AI services so that we can manage risk and protect the integrity in the market.”
A Barclays spokesperson said that Mr Hammerstein signed the letter as an independent person and that it represents the views of panel.
Apple has said that it does not collect Apple Pay data in order to create profiles of users, and that the transaction information is stored only on the devices themselves.