Finland Times

 

Financial Supervisory Authority Director General Anneli Tuominen at a press conference in Helsinki on 14 March 2016. Photo – Lehtikuva.

The Payment Services Act does not permit blocking payment instruments such as online banking codes and bank cards to improve collection of customer diligence data, said the Financial Supervisory Authority (FIN-FSA) on Monday.

 

According to the law, the extent of due diligence data is founded on banks’ own risk-based assessments, said FIN-FSA in a statement.

 

The issue was also addressed during the Financial Supervisory Authority’s media briefing in Helsinki on Monday. FIN-FSA said it had discussed the matter with the data protection ombudsman, banks and other stakeholders.

 

“Mainly, these questions have been justified, but possibly there may be some room for improvement in some other forms,” said FIN-FSA Director General Anneli Tuominen at the briefing. 

 

According to FIN-FSA, banks and other financial market participants have a statutory obligation to know their customers. Enquiries addressed by banks to their customers are one way of fulfilling this due diligence obligation.

 

“The situation is challenging for banks if customers refuse to supply the required due diligence data during the customer relationship,” said FIN-FSA head of department Jyri Helenius in the statement, adding, “In such situations, banks must perform risk-based assessments of appropriate measures. The relevant legislation also needs to be amended.”

 

During the event, FIN-FSA revealed that banks’ net interest income has continued to decline, and their income generation has been increasingly dependent on investment market activity. The sector’s improved results were also boosted by the removal of the bank tax. 

 

“Banks need to prepare for the impact of Finland’s weak economic growth and an exceptionally challenging market environment on their earnings capacity. In addition, the low level of interest rates and uncertainties in the investment market mean that participants in the employee pension insurance sector need to conduct ongoing assessments of acceptable risk levels relative to solvency and return targets,” said Tuominen in the statement.