As the European Parliament advances its position and the Council adopts its General Approach on the Financial Data Access (FIDA) Regulation, leading financial associations, including AFME, EACB, EBF, EFAMA, ESBG, and Insurance Europe, emphasise the need for a well-balanced and carefully assessed framework. They call on co-legislators to deliver a regulation that bolsters European competitiveness, safeguards data security, and provides tangible benefits for citizens and the financial sector.
The FIDA Regulation is seen as a pivotal step in harnessing the potential of the data economy to spur innovation, particularly through cross-sectoral data sharing. Such frameworks promise to deliver new opportunities for customers, improve service delivery, and improve financial inclusion. However, stakeholders caution that the regulation's current trajectory could undermine its objectives without a more focused, evidence-based approach to its development.
Key concerns centre on the need for a balance between market demand, consumer value, and institutional costs. The financial associations stress that the impact assessment accompanying the proposed legislation lacks a thorough evaluation of implementation costs and does not adequately demonstrate market demand or consumer appetite for broader data sharing. Without clear evidence of benefits, the FIDA framework risks diverting resources from innovation in critical areas and harming the competitiveness of EU/EEA financial institutions.
Another significant issue is data security and privacy. FIDA introduces financial information service providers (FISPs) as entities that will handle large volumes of sensitive customer data. However, robust regulation and supervision of these entities, comparable to the standards applied to established financial institutions, are currently insufficient. The associations warn that the current design of FIDA could jeopardise citizens’ fundamental rights to data protection and weaken the resilience of the financial ecosystem.
Despite recent improvements in the European Parliament and Council positions, the FIDA framework remains overly broad, especially regarding data categories. This scope fails to address longstanding industry concerns about data protection, legal clarity, and the competitive impact of the regulation.
The financial sector remains committed to working with EU policymakers to refine the FIDA framework into a well-designed and practical regulation. By addressing these critical gaps, FIDA can evolve into a cornerstone of Open Finance in the EU/EEA, promoting innovation, strengthening consumer protections, and maintaining the region's financial sector competitiveness. This collaborative approach will ensure a framework that benefits all stakeholders.
Earlier in December 2024, the Council of the European Union reached an agreement on the proposed Financial Data Access (FIDA) framework.
Also, FIDA is one of the many relevant topics covered in the recently launched Open Finance Report 2024. Make sure to download the report to find out more about European regulation and its impact on financial services.
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