Apple currently offers multiple different financial services and products in the United States including Apple Pay, Apple Card, and Apple Pay Later, but it's a different story in the United Kingdom. Right now, Apple Pay is all that the company offers and UK banks are worried that won't remain the case for too much longer. Amid recurring rumors that Apple intends to bring its credit card to the UK, some UK banks have called for an investigation into, and potential limitations on, the data that Apple collects about iPhone users' spending habits.
In a letter sent to the Financial Conduct Authority — the UK's financial regulator — banks and insurance executives have argued that there are "multiple imbalances" in the amount of data being collected by companies like Apple and Amazon due to the way they do business. It's argued that there is already a "pressing need" to address the amount of data Apple has on users.
One of the key drivers for concern seems to be Apple's recent launch of a feature that allows UK users to link their bank accounts with the Wallet app. The feature means that current account balances and recent transactions appear in the Wallet app and that has bank bosses concerned that Apple can scrape that data and use it to tailor their future financial products accordingly — something that banks and similar companies have done with credit cards for decades.
Spending habits
A paywalled Telegraph report notes that the Open Banking framework that makes Apple's latest feature possible is paid for by the banks, a fact that likely adds insult to injury for a group already concerned about how the data it makes available is being used.
“Consistent access to information across competitors is essential for fairness in the market,” the letter reportedly said. “The ability of big tech to access private and public retail data and combine it with AI and advanced analytics may create the conditions for market dominance." It goes on to add that while the people who signed the letter don't doubt that so-called "big tech" can deliver good experiences and outcomes for customers, they worry that they aren't obligated to do so. They're also concerned that companies like Apple are able to delve into spending data for free.
The FCA is now investigating whether Apple and others have unfair access to such data and is expected to report on a "call for input" by the summer.
For its part, Apple says that Apple Pay data is not used to build profiles on its users and that all information is stored locally on the device and not uploaded to the company's servers. However, there is no mention of whether any processing of the data brought into the Wallet app via the Open Banking protocol is carried out whether online or locally.
With Apple's future UK financial services potentially including a credit card, buy-now--pay-later scheme, and savings accounts it's easy to see why incumbent banks might be concerned. But just as startup fintech companies have helped to push traditional banks to produce better apps with real-time transaction details in recent years it's possible Apple's entry into the market could also be a boon for consumers — as competition is wont to do.
