EU to Block Big Tech From New Financial Data Sharing System
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The EU is blocking Big Tech from a new financial data sharing system to protect sensitive data and maintain control over strategic infrastructure, sparking discussion on the implications for European consumers and the role of foreign tech in the EU.
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Uhh. I passionately don't want mega corporations to have this information about me - European or not. My bank has it, but even then I'd rather they didn't!
If companies can trivially identify people bad at saving...that won't end well.
Pray elaborate. How do you see the consequences? I can see many possibilities.
Probably not explicitly illegal to do, but an unethical move that props up social harms for no constructive reason.
any other is optional
the mega corporation that spends 50% of all resources says it wants a slice on the other half
No thanks.
Don't you have a phone ?
Regulating big tech is good. Kill gatekeeping platforms and engagement-driven newsfeeds that are tearing us apart. I wish they could do that. Big tech competition with banking, on the other hand, would be welcome.
It's too bad, too, because overall the EU in most places has a history of better representing their citizens. I wish that mechanism was more functional.
My experience is living in 3 EU countries as an American - the banks are similarly terrible and entrenched in each.
Eg until a few decades ago many American states banned banks from having more than one branch.
See also the big struggles Walmart had in trying to become a bank; and conversely see how US banks are (or at least were) banned from serving their customers coffee..
The EU has recently reduced fees for one of the biggest instant payment systems of the world (SCT inst reaches the Eurozone's 350M residents). Compare the quality of that to a wire or to a ACH transfer.
EU is also ahead with security. PSD2's requirements go further than US requirements, and they are also ahead in the magnetic swipe card phaseout.
Wise and Revolut, two companies which brought a lot of innovation to international money transfer, were founded in the EU as well (since 2020 not EU companies any more).
Of course, all of this doesn't mean that the average EU bank doesn't suck. But I heard worse of the US.
> The EU has recently reduced fees for one of the biggest instant payment systems of the world (SCT inst reaches the Eurozone's 350M residents).
But that was done by regulation, wasn't it? Would have been nicer to see that come as a result of competition.
> Of course, all of this doesn't mean that the average EU bank doesn't suck. But I heard worse of the US.
I don't know about the average. But I can tell you that quality varies a lot. I was generally OK with German banks (having grown up there), but UK banks before Monzo (and Revolut, Wise etc) used to be the scum of the earth. Just like their supermarkets used to feel openly hostile to me as a customer before Aldi and Lidl showed up and shook up the market.
Yes, Tesco and friends regularly get told off by the regulator before, but nothing changed until competition forced their hands, and gave customers something they preferred.
Bill Gurly has been crying for years now about how US banks have been bocking/not-participating in equivalent services in US(Fed Now) and for good business reasons for them.
A well functioning market does need regulations. Not everything can be magically fixed by "competition"
https://www.linkedin.com/posts/kivatinos_bill-gurley-on-paym...
Ideally, you can set up your regulations so that competition has more bite.
Much of the time, you can remove special purpose regulations for a specific sector, and can get by with just the generics: enforcing contracts, punishing fraud, etc.
They still had chip&pin before US banks, and dropped unsafe cheques before US banks.
The US banking system, afaik, did one thing better: credit cards. But since the '00s, European ones have been just as good and often better.
Oh, I never banked in the US, so I can't comment on them from a consumer point of view.
> The US banking system, afaik, did one thing better: credit cards. But since the '00s, European ones have been just as good and often better.
I used credit cards perhaps a handful of times in my life. It's almost exclusively been debit cards for me.
Swipe? I don't recall a time when I needed to swipe in US in the last few years. Pretty much tap, tap, tap, tap. Actually you cannot swipe a card in US that has a chip, and probably 99% of cards have chips.
>Compare the quality of that to a wire or to a ACH transfer.
Zelle? Just a qr code or a phone number? And it's free?
>Wise and Revolut
No clue. What's so special that I don't have with Chase?
>EU is also ahead with security
Um isn't that useless? As more scams are via social engineering.
>But I heard worse of the US.
I heard the same about EU, actually MUCH worse :)
I do, earlier this year visiting the USA. The readers on pumps at two different gas stations.
But the EU started phasing out reading magnetic strips twenty years ago, well before the USA had even started issuing EMV chip cards.
> Zelle?
Zelle is only for person-to-person transfers, Europe has had good person-to-business, business-to-person and business-to-business transfers for decades.
> ...
The point wasn't that the USA didn't have these things, but that Europe had them earlier (sometimes much earlier), so the banking system led to this innovation.
Zelle is not just person to person, it's just a transfer. You can pay businesses, people and even transfer to yourself. Zero fees.
Europe is a big continent and I can easily find a place that is way more backwards ;)
Also 2 letters from EMV stands for 2 American companies :).
Also no insane fees for going into the red, or having to pay to get my own money and all that fun stuff that American banks seem to love.
The only problem I have with mine is that it doesn't connect with open banking APIs, but I just default to revolut for that.
It could be that they treated you poorly because you are from the US, but I doubt you'd get treated like that in 3 different countries.
The banking /system/ in europe is superiour. It's crazy that the US isn't part of the IBAN system. ACHs suck, etc.
Revolut and Transferwise help a lot with country level bank shortcomings. But they're not really the same as those banks. And they're exactly two mega companies. In Portugal, there is MBWay, and in Denmark there was Visa Electron (might have changed). These payment systems are used everywhere here due to their low fee at the exclusion of other payment systems. I appreciate the low fees to the vendor but it means that Revolut and transferwise are not an every day banking solution here.
When I lived in Denmark, I could not get a visa electron card despite being a resident because I didn't have credit in the EU. This made me use cash for everything as local businesses did not take normal bank cards / credit cards.
In Portugal, banks charge to keep your money in them without offering interest. As an American, managing interest payments from a non-domestic bank is a tax nightmare so I wouldn't want it anyway. But it's notable that they don't have to compete here at all. It was the same, as I remember, in the other EU countries I was in. In contrast, US banks can be found offering competitive interest rates though brokerages are a better option, still.
My point was not some kind of America versus EU nonsense that this seems to have attracted. It's that banks had an outsized influence on politics in the EU.
If you look at the distribution of market cap of industries in the EU versus the US, you'll note that the financial industry in Europe is much larger as a percentage. Step back and think about what that represents.
The US economy has 14% of public economy in financials vs 25% in the EU:
https://www.msci.com/documents/10199/255599/msci-usa-imi-net... https://www.msci.com/documents/10199/b32acc80-b116-454b-a9c4...
A financial industry being the proportially largest sector is not a good thing. It's a rent that's being extracted from the productive economy.
There has also been a huge decline in bank count in Europe as they consolidate: https://data.ecb.europa.eu/data/datasets/CBD2/CBD2.Q.B0._Z.1...
A decline in business counts is not good. It's not good that the same trend for other business types is happening in the US, either. Western governments are now favoring large businesses that hold political capital at the expense of the smaller businesses. This isn't good no matter the industry.
We should all want our businesses and governments to improve. To do that, we must first understand deeply the problems.
EU should also take a look at Visa and Mastercard. Skimming fraction of most retail payments in Europe for an obsolete service that adds little real value is crazy. With the digital euro ecosystem, Europe has a unique chance in the coming years to build its own payment rails and end this dependency.
Alternatives like Union Pay and Rupay and were built without any of this nonsense. Same for Pix and UPI.
It’s continuously been used to violate rights to privacy and even spying on companies, individuals and politicians.
but then they try to implement severe privacy-invading shit like chat-control, what's happening?
It's a distributed democracy.
Maybe only distributed. /s
Then regulation like unified digital id is big business, the EU is a neoliberal institution, most of everything their member states governments do is through public-private partnerships, there is profit to be made. So investments in things like age verification are funneled to lobby for them. The EU in general is almost as big in lobby spending as the US.
The other thing is the US intel easily gets a full plaintext feed from things like whatsapp, but the EU needs chat control/etc. to get the same access.
Of course, people are free to claim that it won't work, or that it's heavy handed, or that it's secretly nefarious, but there is a plausible answer to "why?" in the title itself.
Also our government (I'm a citizen in the kingdom of Denmark) doesn't listen to experts when it comes to IT/security/encryption and is making a fool of itself..
It will pass.
Once you get that, a lot of thing start to make sense.
Banks wanted to make their own payment solution but since they definitely couldn't on iOS it was pointless to come up with a separate solution for Android. So, they negotiated a contract with both tech firms and that was it.