The supervision of banks and payment institutions is regulated under European laws (Directives), such as PSD2. Essentially, banks and payment institutions must be licensed and must comply with a range of statutory requirements. These requirements are laid down in PSD2 and other regulations, and relate to e.g. institutions' financial soundness, their conduct towards consumers and businesses, competition and the protection of personal data. The national supervisory authorities are responsible for supervising the banks' and payment institutions' compliance with these requirements.
Frequently asked questions
- Can a bank also provide payment services?
Yes, under their banking licence, banks are also allowed to provide payment services. Banks have always allowed customers to deposit and withdraw cash. You can open and hold a current account with a bank. You can transfer money from your bank account to another account, or have money collected from your account by direct debit. Banks issue debit cards linked to current accounts. Banks are also allowed to provide the new payment initiation and account information services that are regulated under PSD2.
- Why is my bank or payment institution under supervision?
The aim of supervision is to protect account holders, maintain the stability and integrity of financial institutions and safeguard the quality of payment products and systems. The supervisory authorities are responsible for checking that banks and payment institutions comply with all statutory requirements and that they are financially sound. They must also check that banks and payment institutions continue to be able to meet their obligations towards customers (consumers and businesses). The supervisory authorities also check that financial institutions have secured their systems and data effectively. In other words, supervision aims to ensure healthy, reliable and secure financial institutions and their customers' and business relations' confidence.
This not only applies to the Netherlands, but to the European Union as a whole. PSD2 also aims to strengthen the European payments market, which is why the supervision of payment institutions has been harmonised. As a result, you can be confident that institutions from other EU Member States are also sound, meet their obligations and can be trusted.
- How is supervision of my bank or payment institution regulated?
The supervision of banks and payment institutions in the Netherlands is regulated in the Dutch Financial Supervision Act (Wet op het financieel toezicht – Wft), which has been in effect for 65 years. DNB is responsible for prudential supervision (see the glossary of terms) and the Dutch Authority for the Financial Markets for conducting business supervision. Banks wishing to operate in the Netherlands must have a licence issued by DNB or by another supervisory authority from the European Union. The largest banks are under the supervision of the European Central Bank (ECB). The supervisory authorities look at several different aspects, such as a bank's financial position, its shareholders, its organisational structure, operational management and risk management. The banks must report to the supervisory authorities on these aspects, and the supervisory authorities regularly perform onsite inspections at the banks.
The supervision of payment institutions is relatively new and has been in existence since 2007. It all started with the first European Payment Services Directive (PSD1), PSD2's precursor. Payment institutions too must have a licence issued by DNB or by another supervisory authority in the European Union. PSD2 lays down the licence requirements and the aspects that are subject to the supervisory authorities' supervision. For the Dutch situation, these provisions have been transposed into the Financial Supervision Act.
- What are the supervisory authorities in the Netherlands?
In the Netherlands, three supervisory authorities are responsible for supervision under PSD2:
- DNB is the prudential supervisor, and issues licences to banks and payment institutions. DNB supervises the financial position of banks and payment institutions, access to bank accounts, risk management and authentication (i.e. how your identity is verified by the bank and how you can give consent for access to your bank account).
- The Netherlands Authority for the Financial Markets (AFM) is the conduct of business supervisor. The AFM supervises the conduct of payment institutions and banks towards customers.
- The Authority for Consumers & Markets (ACM) supervises access to payment systems, current account services and the charges for the use of payment instruments.
The fourth supervisory authority is
- the Dutch Data Protection Authority. It is responsible for the supervision of data protection under the General Data Protection Regulation.
The supervisory authorities are cooperating as much as possible and have concluded agreements for this purpose.
- Are banks and payment institutions abroad also under supervision?
Yes, banks and payment institutions abroad are also under supervision. Each country has its own regulatory arrangements. In terms of substance, supervision is harmonised to a great extent in the European Union, also as a result of PSD2. Thanks to PSD2, the supervisory authorities in the EU Member States are now focussing on the same subjects. PSD2 also ensures increasing harmonisation in the execution of supervision.
- If a payment institution is under foreign supervision, how do the foreign and domestic supervisory authorities cooperate?
If a payment institution is established in another EU Member State, it is supervised by the supervisory authorities of that Member State. Subject to conditions, foreign payment institutions are also allowed to operate in other EU Member States, such as the Netherlands. This is one of the pillars of the single European payments market. In principle, the supervisory authorities of the country where the payment institution has its registered office are responsible for the institution's supervision. If a Dutch supervisory authority such as DNB or the AFM identifies a problem situation at a foreign payment institution, it will notify the relevant foreign supervisor and ask them to resolve it.
- How do I know whether an institution is under supervision?
If you do not know a particular service provider or payment method, there are several things you can do. You can ask the service provider for more information, e.g. if it has a licence and if it is under Dutch supervision.If this is the case, you cancheck this in DNB's register. If the service provider is from abroad, you can ask it in which register their licence can be checked. If this is too much trouble, or if you remain in doubt, you can always withdraw your consent for service provision. Please note that if you have made a payment through a payment initiation service provider, you cannot undo this. You can ask the service provider to erase your personal data or you can notify the Dutch Authority for the Financial Markets (AFM). The AFM supervises how financial institutions treat their customers. Contact theFinancial Markets Information Lineor use theAFM Contact Form.
- How do I know whether I can trust a foreign institution offering a new payment method?
If you don't know the service provider or the payment method, you can ask the service provider for more information, e.g. if it has a licence and if it is under supervision. If that is the case, you can check this in the relevant supervisory authority's register. Ask the service provider where this register can be found. If the foreign service provider has a licence, you can expect it to be sound, to meet its obligations and to be reliable.
- What can I do if I have a complaint about a bank or payment institution?
If you have a complaint about a bank or payment institution, you have several options. For instance, you can contact the service provider (e.g. by telephone) to see if the problem can be resolved easily.
If that is not the case, it is best to make your complaint in writing. In most cases, you can make a complaint through the institution's website. Otherwise, you can send an email or letter and ask for a written response. You should receive a substantive response within 15 business days. If you do not receive a response, or if you are unhappy about the response, the Financial Services Complaints Board (Klachteninstituut financiële dienstverlening – Kifid) may be able to help you and act as a mediator.Check the Kifid registerto see if the provider is affiliated to Kifid.
You can also contact a consumers' association or the Dutch Authority for the Financial Markets (AFM). Depending on the nature of your complaint, you could contact the AFM or the Dutch Data Protection Authority. The AFM is responsible for supervision of financial institutions' conduct towards their customers and their compliance with PSD2 requirements. Contact theFinancial Markets Information Lineor use theAFM Contact Form. The AFM will not intervene on your behalf, but it will register your complaint and use it in its inquiries into payment institutions and banks.