EU Council agrees on FIDA framework

The framework represents a legislative effort designed to improve data accessibility among financial institutions. The initiative aims to establish a standardised approach to sharing customer financial data while ensuring appropriate safeguards for consumer protection. 

The FIDA framework aims to facilitate better data sharing across the financial sector, enabling institutions to provide better financial products and services. Examples include customised investment opportunities, streamlined loan applications, and competitive interest rate offerings. 

This initiative is also expected to support competition within the financial sector and improve access to finance for consumers, particularly individuals and small and medium-sized enterprises (SMEs). To achieve this, the proposal introduces harmonised rules governing the types of data to be shared, the mechanisms for sharing it, and compensation for entities making such data available. 

Additionally, the framework emphasises consumer control over their data, with provisions ensuring that customers can make informed decisions about sharing their information. It empowers European Supervisory Authorities to establish guidelines to prevent risks such as unfair practices or exclusion.

Main features of the Council's position

The Council has largely endorsed the European Commission’s original proposal, adopting a phased implementation approach. Its position includes: 

• Defined scope: clarifications on the specific data sets, products, and sectors the rules will apply to, alongside a timeline for compliance. 
• Sectoral exclusions: data related to occupational pensions is excluded, though member states may opt into the regime. 
• Flexibility on non-digital data: data sharing schemes can impose limits on sharing customer information that is not already in digital form. 

The Council also reinforced provisions related to third-country financial information service providers (FISPs) and tightened regulations on gatekeeper entities to ensure fair competition. 

With this agreement, the Council is set to enter negotiations with the European Parliament to finalise the legislation. Following consensus, both institutions must formally adopt the framework before it can be published in the EU’s Official Journal and enter into force. 

The FIDA framework, first proposed by the European Commission in June 2023, aligns with broader efforts to modernise EU financial regulations in light of digital transformation. It complements the proposed Payment Services Regulation (PSR) by addressing data access beyond payment accounts, aiming to foster data-driven innovation in the financial sector.