Nicola Breyer shares insights on FIDA, Open Finance challenges, and how collaboration could shape the future of financial data in the EU.
I began my career in internet financial services in the late 1990s, launching Egg Banking (Prudential) and bringing eLoan to Europe – when people still said, ‘No one will ever pay with a credit card on the internet.’
Since then, I’ve worked in VC, led and sold a portfolio company, driven digital transformation in media, and scaled businesses in financial services. At PayPal (Head of Growth & Business Operations, GSA), I led innovation in Continental Europe, launching projects with Google, Mastercard, and early Open Banking initiatives. As CEO & MD of Finleap Connect, I restructured the business, raised funding, led a major acquisition (ndgit), and rebranded it to Qwist.
Now, I advise tech companies and financial institutions on Open Finance strategy while co-initiating the German Open Finance Charter. I’m also a speaker, angel investor, and board member, with a focus on supporting female founders.
FIDA is the first expression of the EU Data Strategy 2030, which states (in a highly simplified way) that, in order to foster innovation in a truly digital society, we must make data available to those individuals and companies generating it. The financial services sector and its products are the first in a line of several other industry sectors such as the government, energy, retail, and telcos. This trend aligns with initiatives such as the UK’s Smart Data Act.
FIDA is an ambitious legislation. It challenges the Financial Services sector to aggregate, digitize, and expose a wide range of data, some of which is far from available in a format ready for Open Finance. Criticism mainly focuses on the following topics:
Scope and complexity;
Costs and general regulatory and compliance burden;
Concern over non-European players gaining further market access;
Lack of clear monetisation models (although part of scheme governance).
To give this a bit more grip:
A large part of lobbying is around trying to prevent additional effort and cost to be incurred by association members.
When speaking with most large banking or insurance associations, most will state they are pro-Open Finance.
Criticism focuses on complex governance but also the broad scope of data.
To the critics’ mind, no clear use case definition (although it is clear the EU intends to empower its citizens to independently manage and plan for their (financial) lives, which requires the availability of data from most financial products).
Ambitious time frame.
Cost recouping not clearly specified (although clearly outlined in scheme scope) – what becomes evident is that, to reap benefits from FIDA, current data holders must become data users, in order to drive use of APIs (cost recouping) and generate new revenue through attractive consumer and SME (mainly) offerings.
The fear of ‘bigtech stealing customers and business’ is real, realistic or not: banks are those especially concerned with GAFAs (Google, Amazon, Facebook, Apple) receiving access to comprehensive consumer data through FIDA instead of fostering innovation in Europe.
Banks have worked hard on legacy technology and are just becoming ready to leverage the value of their own customer data through digital marketing and data analytics. Most of them are also investing heavily in AI and the organisational efficiencies that come with these – they would like to be able to focus on this and reap the benefits rather than having to devote resources on exposing this data to the outside world.
The insurance world has real concerns about the feasibility of making data technically available. They could benefit from a new ‘Bancassurance X.0’ surge.
The financial advisory/intermediary markets are going to go through structural change and will see both significant challenges and opportunities in going through a generational shift.
I believe we need more constructive dialogue and education around FIDA with all stakeholders, and an approach that fosters the benefits of what I believe is regulation destined to shape rather than limit/control/prevent. This is what we are looking to do by creating the German Open Finance Charter, for instance.
Organisational silos in large FIs.
No clear ownership within the organisation or at C-level.
Lack of digitalisation for a number of financial products and insurances.
Very lean or no API teams.
The significant burden of regulation vs. the number of compliance experts.
Lack of customer value thinking and ability to create new customer offerings and revenue models across the organisation.
Cost of regulation internally seen as preventing innovation efforts – especially at a time where European banks (in particular) are facing significant pressure to cost-control.
I Believe it has to be realistic. We are already seeing discussions going on about schemes, how to organise, international vs. national.
Key concerns revolve around conflicting interests of players and the number of schemes created within the EU. It may make sense to create a central governing body within the EU to ensure standards, comparability, interoperability, and fair revenue models being created – not to mention use case control and (dare I hope) regulatory sandboxes?
If we keep governance lean and simple, 18 months must be a feasible deadline.
FIDA should provide just that. The discussions I have had over the past number of months all point into the direction of using existing data standards (Berlin Group, BiPro, others) instead of creating new ones. The fact that 27 countries will have to abide by the same regulation at the same time, is already fostering dialogue and collaboration between associations and other market players, in what needs to become an ecosystem approach to work.
The increasingly international markets will ensure that interoperability will be made possible for as many financial products and services as possible (some only exist in certain countries, not in others).
Whether this will also create ‘portability’ of financial services needs to be seen.
The financial services industry is home for many smart and talented people. They recognise the potential benefits of engaging in the Open Finance market, and the cost and effort required to do so. However, there also remains a substantial knowledge gap across the market, particularly at senior levels. This happens not only at entities required to comply with PSD2 but also within institutions, advisory groups, and private banks that have yet to fully assess what are opportunities presented by FIDA.
Remember, so far, a lot of associations have lobbied against FIDA and were hopeful their efforts could prevent the regulation from happening, in its current or amended form. While the tide is slowly changing, this anti-FIDA sentiment still rings true particularly in large markets like Germany and Franc, but there is also caution expressed from countries like the Netherlands.
We need to turn the dialogue from ‘if’ to ‘how’ and ‘why’.
We also need to help FIs build competency in truly creating tangible value from their own and third-party data. There are a lot of projects and consumer propositions being developed in the banking sector, which is great to see.
I believe that customers will vote with their clicks and Euros.
I also believe that bigtechs do not make their strategy dependent on any regulator. They can find large institutions as partners to collaborate with them, or they can acquire within the technology sector.
FIDA has measures outlined as to how international companies can and will participate in the European Open Finance market. These will be a key discussion between Parliament and Commission within the upcoming trilogue, as they have diverging points of view.
I believe that a balance needs to be struck between a liberal market, which fosters the best customer offers and technological innovation, and serving all customers in a market with key financial products or information derived from the use of these.
I do buy the large banks’ and insurances’ argument which is that they have an obligation to serve all customers in a market with bank accounts, access to insurance, and not only the ‘digitally savvy’ – but why not subsidise more traditional channels and service offers for as long as they are needed to free up more resources for the building of digital business models?
Why not create programmes fostering innovation in the current financial services players? Also, why not make it easier for financial institutions to partner with innovative technology companies by lowering the barrier to entry for such collaborations in vendor management, legal, and compliance? Why not subsidise standardisation programmes such as ISO for small tech companies?
Bigtechs are cautious about Europe when it comes to data regulation, GDPR, the AI Act, they will also need to partner with local TPPs (FISPs), if current legislation prevails… is it really the correct approach to close ourselves off because ‘they have better access to customers/can build better offerings’? Can this be our European ambition?
See above – it should foster collaboration, not competition. Fintechs have grown up. They are regulated, no longer in their first year of operation, employ a significant number of people.
Fintechs can be more nimble than large companies but there is deep sector expertise within large corporates which fintechs can hugely benefit from, as well as a significant number of internal customers and loyal branded customers.
I believe that, if we want to be serious about creating a well-functioning Open Finance ecosystem, we need a variety of players at the table: banks, insurance providers, financial advisers, (I am not going to name all FS types like brokers, private banks, etc.), fintechs, technology consultants and implementation companies, lawyers, customer experience experts, politicians, and the regulator.
This question is easily asked and very complex to answer in a succinct way.
This is a non-comprehensive list:
Benefits for financial institutions:
New key learnings about customers in order to drive customer value;
A unified data structure, consent management, rules for agentic AI;
Launching their own data wallets and digital ID solutions;
Serving new customer groups to manage their financial lives;
Helping business customers to run their business more efficiently;
Creating true hyperpersonalised products & services;
Partnering with others to offer a broader product portfolio;
A choice of business model: product provision vs. customer interface;
Embedded Finance offerings for non-FS industries;
Organisational change around data, breaking up old silos;
Moving into the data infrastructure space?
Etc.
Benefits for fintechs:
New solutions for people to manage their financial lives, not managing their finances (use cases around work & travel, life events etc.);
Financial education making true inroads and solving current inequalities;
Loyalty solutions for branded customers finally becoming market-ready;
Providing aggregated data services;
Specialised deep data analytics expertise to partner with large corporates;
Providing customer best customer experience to established players;
Focusing on driving the first wave of truly agentic AI in FS.
Benefits for consumers:
More options for financial management;
More independence from current players;
Better prices and comparability;
Transparency in what data is being shared and revoking of consent;
More active management of their financial lives and more optimal solutions;
Less dependency on financial advisors as agentic AI takes hold;
Hyper personalization;
Making FS attractive for the next generation of digital-native customers;
Financial advice as well as financial services becoming a more attractive employer for the next generation – as data-driven players.
See above: FIDA will provide the basis for AI-driven financial services, by providing the infrastructure for AI, which is standardised, consent-based, and regulated. It will also provide the platform for creating digital ecosystems, portability, interaction with digital ID, mandates, and payment options for AI and more.
The UK is making strong inroads in relevant regulation overall:
Use case-based launch of a digital ID wallet;
From Open Banking (via Open Finance) to Smart Data for various sectors (through industry collaboration and strong industry bodies/schemes having been formed);
Inter-dependency with AI regulation.
What I appreciate in the UK’s approach is that the government has identified data as a key economic driver. They are calculating the positive economic impact for all of these measures, as well as having included data in the next calculation of the UK’s economic value as an asset.
In the EU, we still lack being able to draw a concise picture of the convergence of all those technologies and regulations, as well as the calculation of positive economic impact.
We also do not have national governments in the large member states who have a well-defined data strategy and people who lobby and stand for it. This is partially due to the shift in governments, as well as the focus on issue within the traditional economic sectors such as car manufacturing, etc.
The importance of FIDA providing a strong and broad regulatory framework lies in its lighthouse character for the EU Data Strategy 2030. The EU needs to demonstrate that all regulations discussed above form the basis for an EU-wide data economy, fueling economic growth through technology, which can then create pressure on national governments.
Financial services are one of the hardest data sectors to crack. Telco (think location data), retail (think itemised purchasing data), energy (truly measurable ways of reducing cost of living), education (portability and comparability of education records), and so on, would then follow without as much difficulty.
FIDA has been announced to go into Trilogue in early April 2025. The positions between the Parliament and the Commission are clearly outlined, so this will form the ground for discussion and negotiation.
Scrapping FIDA completely is not on the table but it needs to be seen if we can get to a pragmatic, market-driven, use case-based regulation that is encompassing enough to enable true innovation and change.
Even if FIDA in its current form was to be abolished, Open Finance will happen – either through a new proposal or through market-driven innovation (with much more difficulty in interoperability, compatibility for AI, and with much more regulatory uncertainty).
For the EU, besides what I have outlined above in this interview: if the use cases are around managing a person’s and small business’ entire financial lives – the scope of regulation needs to reflect this. Do not respond to lobby groups and exclude individual financial products. Be pragmatic in governance. Consider use case-based regulatory sandboxes and a central governing body. Speak with all stakeholders about the value they can create for themselves through Open FinanceLobby more with national governments to proactively embrace open data strategies and digital innovation.
Embrace the opportunity of Open Finance and think what economic benefits you can create with it for your business.
Ask openly for what you need to make it happen rather than lobby with a blunt ‘no’.
Make Open Finance a C-Level opportunity.
Use it to accelerate your data strategies.
Consider the transformative impact of data and AI on your organisation now, not only from an internal PoV and cost-saving measures in your current organisational setup, but also in the way you deliver value to your customers
Fully digitally native customers are going to be the majority – what’s your solution for them?
If we can manage to create an Open Finance platform across 27 countries, inter-linked with digital identity and data wallets, we will be able to see significant innovation and customer value coming from the EU in the next wave of data-driven financial services.
If we lose ourselves in individual financial products, nitty gritty governance, and a ‘beige’ solution as a compromise to all lobbying groups, the EU will fall behind in the international competition.
Nicola Breyer is an experienced leader in financial services and Open Finance. With experience spanning fintech, VC, and major institutions like PayPal, she advises on Open Finance strategies, innovation, and AI. She co-initiated the German Open Finance Charter and supports tech companies and financial institutions across Europe.
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