FiDA: enhancing customers’ control over their financial data
On Thursday 18th, 2024, the Committee on Economic and Monetary Affairs (ECON) published a press release informing that Members of the Parliament (MEPs) are proposing new, innovation friendly rules to allow customers to keep their financial data safe. But also to enable a more efficient use and therefore benefit from better financial services, in the context of FiDA (Financial Data Access framework).
As explained in the press release, “the framework would be established for the access of customer data processed by financial institutions across the financial sector beyond payment account data”. Based on customers’ permission, their data (including holdings of savings and investments in financial instruments and insurance-based investment products as well as data collected for the purposes of carrying out a suitability and appropriateness assessment) would be made available in order to develop and provide tailor-made and data-driven financial products and services.
For smaller companies the access to data would be useful when attracting new customers, lowering costs and barriers of entry thus increasing competition and innovation for financial products and services.
The key points tackled by the MEPs are the following:
- Data related to sickness and health cover would be excluded from the scope, as well as confidential business data and undisclosed know-how.
- Large digital platforms designated as Gatekeepers pursuant to the Digital Markets Act should not be eligible to become financial information service providers (currently designated gatekeepers are Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft)
- MEPs proposed the data access by way of high-quality technical interfaces
- They also agreed that data holders and data users should be allowed to use existing market standards and infrastructures for technical interfaces like application programming interfaces (APIs) when developing common standards for mandatory data access
- Data holders should be able to request reasonable compensation from data users for costs incurred in providing access
- The European Banking Authority (EBA) should establish a register of authorized financial information service providers, as well as financial data access schemes agreed between data holders and data users
As highlighted by Michiel Hoogeveen, the lead MEP: “In an ever more digitalized world, it is important that consumers and firms have more efficient control access over their financial data beyond payments. With Open Finance, they will be able to benefit from financial products and services that are better tailored to their needs”.
MEPs adopted their proposal for a harmonized framework for access to financial data at the EU level, with 43 votes to 1 and 5 abstentions. With the European Elections to take place on June 6-9, the file will be followed up by the new Parliament.
Source: European Parliament
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