Regulator gives green light to on-line account aggregation services

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.