Online banking: Will the CJEU 'provide' a 'durable' approach for industry?

Content Services has long created a cloud of uncertainty around whether online banking can be used to "provide" prescribed information. The recent Advocate General opinion in the BAWAG case distinguished Content Services and took a more pragmatic approach.

On Wednesday 25 January 2017, when the BAWAG judgment is due, we will see whether the CJEU will "clear the skies" and adopt the same reasoning as in the AG opinion.

The opinion examined whether a notice of variation under the PSD sent to a secure online banking mailbox was "provided" in a "durable medium". By way of recap, here is a summary of the main points:

 

Online banking as channel for information in a 'durable medium'

The opinion noted that most online mailboxes would not meet the definition of "durable medium", as they are hosted by the PSPs. This means that the possibility of information being altered online once posted cannot be ruled out. However, this reasoning suggests that the definition could be satisfied if the platform was hosted by a third party and appropriate controls are in place to prevent changes.

More helpfully, the opinion stated that where online banking was not a durable medium, it could be the channel for sending information that is itself in a durable medium where it is in a form which can be downloaded or printed (e.g. a PDF). On this view, online banking can be seen as a "gateway" to transmit a durable medium.

 

Two-tier approach to 'providing' information via online banking

In order for information to be "provided", the opinion concluded that a "two-tier" approach would need to be taken: the information would need to be posted to the online banking platform (at which point the information would be "made available") and a text or email alert sent to the customer to tell them it has been posted (bringing it under the ambit of "providing" information). This approach reflects general industry practice but appeared to be ruled out by Content Services, so this element of the BAWAG opinion should be welcomed.

 

What might happen on 25 January?

If the opinion is adopted by the CJEU, we will have greater clarity on how online banking can satisfy regulatory requirements, although firms will need to analyse its wider impact on their processes. The judgment won't answer all questions in this area as BAWAG only looks at a notice of variation under the PSD.  How it would be applied to other communications and legislation with similar requirements such as the CCA will remain unclear, although it might demonstrate a sensible way forward.

If the opinion is not confirmed, this could have more significant implications given the opinion broadly reflects current industry practice.

We will publish an update as soon as possible after release of the CJEU's judgment.

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