SA banking giant Absa has reportedly prohibited its customers from using the services of online money management start-up 22seven, since its launch last Thursday.
Following persistent difficulties with linking and updating Absa customers' accounts for aggregated feedback this week, personal financial management (PFM) site 22seven yesterday said it had received confirmation from its US technology partner, Yodlee, that Absa has been blocking Yodlee from accessing users' details, since 22seven's public launch.
Founder and CEO of 22seven Christo Davel says it is not clear why Absa has taken the sudden step to block Yodlee, considering the PFM site has been in a closed testing period for several months and “Absa accounts [had] never been an issue”.
This follows a unanimous anti-mentality towards 22seven from SA's “big four” banks, following its highly-publicised launch. Standard Bank, Absa, First National Bank and Nedbank have all spoken out, in varying degrees of censure, against their customers' using the third-party service provider.
Davel says that, while the banks' disapproval hardly came as a surprise, he thinks the financial entities need to question their mindsets. “To equate an accredited, high-profile PFM site with fraud and phishing parties is disingenuous. 22seven consists of an established team of industry veterans and has blue chip investors behind it.” He alludes to what he calls often-employed “FUD” tactics by technology companies, such as the propagating of fear, uncertainty and doubt to cast misgiving in the minds of potential users.
Odd one out
In this latest bank versus third-party PFM scenario, Absa appears to be the anomaly, with its three counterparts abstaining from prohibition methods, but reinforcing their stance that the disclosure of logon credentials to any third party is not advised.
Standard Bank, FNB and Nedbank verified they would not put any measures in place to preclude their customers from using 22seven's PFM tools. Standard Bank says it does, however, ask its clients to ensure they take the responsibility for their accounts. “[Standard Bank] recommends that clients do not use Web sites where they are asked to provide their login credentials, thereby putting their accounts at risk.”
Lee-Anne van Zyl, CEO of online banking at FNB, says the bank “definitely does not see the need to block its customers from using the PFM tool”. She says it boils down to client education and adds that FNB customers are able to avert risk by opening a secondary profile with view-only capabilities.
Managing executive of personal banking and client value management at Nedbank, Anton de Wet, says Nedbank recognises the right of its clients to make their own decisions. “[Nedbank] will not force customers to either adopt our own PFM offering, or disable them from using another solution.”
Currently involved in negotiations, Absa is unable to comment in detail as to a way forward, but says PFM solutions should never be presented to the market at the cost of the customers' security. “Asking online banking users to submit sensitive personal details to a third party poses a fundamental risk to customers' security. It directly contradicts the online banking terms and conditions of all South African banks.”
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