Open Finance: the Financial Data Access (FIDA) proposal is out!

By Anne-Sophie MORVAN, Chief Commercial Officer @ LUXHUB

After several years of preaching around Open Finance, the European Commission is now paving the way to make it a reality. Most of the financial institutions fall in the scope of the proposal for a Regulation on a Framework for Financial Data Access (FIDA) which was just published today. Their obligations: to make available data (i) to the customer and/or (ii) to make available data to a data user (upon request from the customer). This proposal constitutes in our opinion a revolution, which we will briefly describe hereinafter.

What are we talking about in two sentences?

Subject to the end-customer permission, financial institutions will have to provide third parties with certain customer data continuously and in real-time. Such provision of data shall be performed in the context of a financial data sharing scheme, which will determine notably the compensation that the data holder can request for such provision of data.

Who is concerned (as data holder or data user)?

• credit institutions;
• payment institutions;
• electronic money institutions;
• investment firms;
• crypto-asset service providers;
• issuers of asset-referenced tokens;
• AIFM;
• UCITS ManCo;
• insurance and reinsurance undertakings;
• insurance intermediaries and ancillary insurance intermediaries;
• institutions for occupational retirement provision;
• credit rating agencies;
• crowdfunding service providers;
• PEPP providers;
• financial information service providers (the latter will however solely act as data users based on the current proposal).

Next to AISPs, let us introduce you to FISPs

A Financial information service provider (FISP) is defined as a data user that is authorised by a competent authority to access the customer data listed in FIDA for the provision of financial information services. This newly introduced status is very close to the existing account information service provider (AISP) status introduced by PSD2.

In this respect, a review clause has been inserted in the proposal in order for the Commission to examine whether the introduction of the rules under FIDA impacts the way AISPs access data and whether it would appropriate to streamline the rules governing the sharing of data applicable to AISPs.

Which data will be accessible?

The proposal lists exhaustively the customer data which shall be accessible, namely:

• mortgage credit agreements, loans and accounts;
• savings, investments in financial instruments, insurance-based investment products, crypto-assets, real estate and other related financial assets as well as the economic benefits derived from such assets; including data collected for the purposes of carrying out an assessment of suitability and appropriateness (MiFID II);
• pension rights in occupational pension schemes;
• pension rights on the provision of pan-European personal pension products;
• non-life insurance products, with the exception of sickness and health insurance products;
• data which forms part of a creditworthiness assessment of a firm which is collected as part of a loan application process or a request for a credit rating.

A big step forward

FIDA is a strong statement from the European Commission to bring the financial sector to the next level, into the data economy. We believe that this proposal – even if it could be extended to a larger scope of data – goes in the right direction to unlock the development of new business cases and innovative products for all stakeholders of the value chain.

What are the next steps?

FIDA is for now at the proposal stage. It will go through the legislative process at the European level. Once adopted, the Regulation will in principle apply 24 months after the date of its entry into force, except for the provisions relating to financial data sharing Schemes and FISP authorization which will apply from 18 months after the date of entry into force of the Regulation.