(Bloomberg) -- In one of the world’s most digitally advanced corners, consumer groups are now demanding much better data protections against the financial industry.
“The big issue is privacy,” Jan Bertoft, the head of the Swedish Consumers’ Association, said in an interview. Right now, it even overshadows risks like “getting cheated and losing money,” he said.
The group is speaking out as the Facebook Inc. scandal sends shock waves across the globe, triggering a sense of indignation among consumers as technology moves faster than laws. Against this backdrop, Sweden’s status as a pioneer in digital banking is starting to raise questions. And being the world’s most cashless society makes it that much easier to track everything consumers do.
Sweden is known for having tougher bank capital rules than most other places. But when it comes to digital regulation, things are a bit more patchy. For example, the practice of screen scraping -- when companies log into bank accounts on behalf of customers -- is unregulated in Sweden. That’s in contrast to neighboring Finland.
Sweden’s finance industry has embraced open banking, in which lenders create interfaces so other companies can directly access accounts once customers give their consent. A new European payment services directive requires data sharing with fintech giants such as Apple Inc., with the intention being to give consumers more choices.
But Bertoft at the consumer association, which serves as an umbrella group for 21 organizations across Sweden, says no average human can penetrate the fine print that results in a consumer’s permission to harvest their personal data.
“You can’t understand what you’ve actually promised to do and what’ll happen with your data and whether they can change the terms any time they want,” he said.
At Sweden’s Financial Supervisory Authority, the feeling is that the development so far doesn’t warrant action.
“We haven’t seen any actual dramatic negative impact on the market,” said Stig Johansson, senior supervisor, market conduct supervision, and head of the agency’s Innovation Center. “We have been lucky in the sense that these participants have behaved quite well. We haven’t seen any misuse of data.”
But some in the industry are cautious. Johan Torgeby is the chief executive officer of SEB AB, one of Sweden’s biggest banks. He says requiring banks to make accounts available to anyone who asks is “in conflict with the old style of protecting the data.” SEB plans to tell customers to “be very careful” when deciding with whom to share their data.
Johansson at the FSA says new European guidelines should address the concerns. “We hope that it will enhance consumer protections since these companies will know they are under supervision,” he said.
But according to Bertoft, Swedes are feeling more cautious toward their banks, with the industry already ranking lowest in consumer surveys.
“Banking plays in a league of its own,” he said.
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