Changes to SCA welcomed by Open Banking firms

To the delight of firms with permission to provide Account Information Services (AIS) the FCA has finalised its changes to Strong Customer Authentication (SCA) in PS21/19.

Key changes proposed earlier this year in CP21/3 included: 

• exempting banks the need to reauthenticate customers every 90 days through SCA; and
• mandating the use of dedicated interfaces (such as APIs) by account providers for certain retail and SME payment accounts.
  

The FCA has now confirmed that rather than being sent to their bank to authorise Open Banking firms to access their data every 90 days, users can simply consent directly with the AIS provider. The hope is that this will reduce customer churn. 

The change is an interesting development given that the European Banking Authority (EBA) is currently exploring extending the reauthentication period from 90 days to 180 days. Should this go through, we may see the FCA make further changes in order to ensure the UK remains competitive. But, for now, the FCA is making its changes as consulted on with the protection of consumers in mind.

‍

The proposed amendments will help remove barriers to continued growth, innovation and competition in the payments and e-money sector, in particular for open banking - FCA

‍