Finnish regulator also grants exemptions for strong customer authentication implementation

Maria Nikolova

The additional time granted by the FIN-FSA for the implementation of requirements and change processes is temporary.

Finland’s Financial Supervisory Authority (FSA) has become the latest regulator to permit temporary exemptions for implementation of strong customer authentication (SCA) in online card payments.

The Finnish regulator has announced that it does not intend to impose administrative sanctions on its supervised entities, even if supervised entities neglect their legal obligation to authenticate customers strongly in connection with online card payments. The purpose of this is to ensure the seamless continuity of online card payments and to avoid unreasonable inconvenience to consumers.

The additional time granted by the FIN-FSA for the implementation of requirements and change processes is temporary. The FIN-FSA will decide on the length of the transitional period this year after consulting the European Banking Authority and the supervisors of other Member States on the issue. Later this year, the FIN-FSA will require all of its supervised entities that are parties to online card payments to have a plan for implementing the change process.

The transitional period aims to promote the smooth adoption of solutions that meet the regulatory requirements. The FIN-FSA’s policy is in line with the statement issued on June 21, 2019 by the European Banking Authority which allows national supervisors the opportunity to grant additional time to various parties in the sector to implement the change processes required for strong customer authentication.

The regulatory framework on strong customer authentication enters into force on September 14, 2019. The FIN-FSA cannot change the date of entry into force of the regulations. The entry into force of the regulations will impact, among other things, liability for cases of abuse between consumers and their service providers, and thus this policy will not impair the consumer’s rights in card payments. The FIN-FSA reminds supervised entities that consumer communications must provide a true picture of division of responsibility in cases of abuse.

On June 24, 2019, the FIN-FSA issued a separate statement on online banking code lists as part of strong customer authentication. According to the statement, customers should be able to use the current online banking code lists in payments and accessing payment accounts until the bank has adequately ensured the usability, accessibility and reliability of new methods.

Strong customer authentication refers to electronic authentication of payment service users that protects the confidentiality of security credentials and uses a procedure based on at least two of three mutually independent options. These options are knowledge, i.e. something only the payment service user knows (e.g. PIN code, password), possession, i.e. something only the user possesses (e.g. mobile phone, code calculator), and inherence, i.e. something only the payment service user is (e.g. fingerprint, face map).

Similar exemptions and extensions of the implementation of the SCA have been granted by the UK Financial Conduct Authority (FCA) and Denmark’s FSA.

Read this next

Executive Moves

Finalto recruits Antony Parsons as head of liquidity

Finalto, the financial trading division of Gopher Investments, is making a broader push into the liquidity provision space, culminating in a new appointment focused on expanding the business into new markets.

Digital Assets

Huobi introduces Tether’s stablecoins pegged to euro, gold

Huobi, the world’s sixth-largest crypto exchange by trading volume, is set to introduce for its clients two stablecoins representing ownership of physical gold and Euro-pegged tokens.

Retail FX

Saxo Bank reports lackluster volumes for November; FX up 40% YoY

FX trading volumes through Saxo Bank’s platforms improved slightly in November, extending its volatile curve as investors continued to weigh central banks’ policy against concerns over a global economic slowdown.

Executive Moves

CMC Markets taps Finalto’s Julia Free to head UK compliance

CMC Markets PLC (LSE:CMCX) has onboarded Julia Free as its newest head of UK compliance as part of a broader organizational reshuffling at the UK’s biggest spread better.

Digital Assets

Ankr successfully patches hack, will reimburse victims and take actions to prevent further attacks

DeFi protocol Ankr plans to reimburse its affected users after a hacker managed to exploit a bug in its code that allowed for unlimited minting of its liquid staking token.

Industry News

ASIC cancels/suspends AFS license of AFSL Group and Quantum Funds Management

ASIC canceled the AFS license of AFSL Group because it failed to lodge statements and audit reports and it did not maintain AFCA membership. The Australian regulator suspended Quantum because it does not have the required professional indemnity insurance coverage.

Executive Moves

BidX Markets hires Shaun French as Research Analyst – Multi Asset

“We believe with his background in the Financial Markets and being based in Dubai, he will be able to provide our clients with access to outstanding research, while also being in a great location to help support our international clients base which is growing at a rapid pace’’.

Institutional FX

Nasdaq migrates US options exchange to AWS with +10% performance in round-trip latency

Nasdaq has announced the successful migration of the core trading system of Nasdaq MRX – one of its six U.S. options exchanges – to Amazon Web Services (AWS).

Institutional FX

TraditionData launches oil swaps pricing data at a critical time in OTC oil traded markets

TraditionDATA has announced the release of a new proprietary Oil Swap Model (OSM) which brings further visibility into illiquid and opaque oil markets.

<