FiDA: is the EU prepared to move from Open Banking to Open Finance?
The EU has made significant progress to unleash the full potential of data in the financial sector. This includes the Payment Services Directive 2, establishing Open Banking, the 2020 Digital Finance Package, and the Financial Data Access and Payments Package, comprising an amendment to PSD2 (which would become PSD3), a Payment Services Regulation (PSR), as well as a legislative proposal for financial data access (known as the FiDA Regulation).
With FiDA, the European Commission is introducing Open Finance. Addressing the shortcomings that have not allowed Open Banking to take off in the EU, FiDA would imply the possibility of sharing much more data, e.g., data on loans, savings, investments, pensions, and nonlife insurance products, in real time and continuously, of course with consumer consent. If the set-up proposed by the Commission goes forward as it is, Open Banking would be regulated under PSD3/PSR and Open Finance under FiDA but under very different conditions.
This ECRI Explainer aims to understand the rationale behind the FiDA proposal and its main features, as well as assessing the Commission’s original proposal and its expected interaction with other pieces of legislation. In short, is the EU really and finally prepared to move from Open Banking to Open Finance?
Judith Arnal is Senior Research Fellow at ECRI and CEPS. Fredrik Andersson is Researcher at ECRI and CEPS.
