Call for a Comprehensive Assessment of the FiDA Framework for Competitiveness and Data Protection

As interinstitutional negotiations (trilogues) on the Financial Data Access Regulation (FiDA) are set to begin in January, several European financial sector organizations—including the AFME, EACB, EBF, EFAMA, ESBG, and Insurance Europe—are urging for a deeper assessment of the framework's implications before its final adoption.

These associations have expressed concerns about the potential negative impact of the current proposal on European competitiveness, data protection, and the financial value chain, while reiterating their support for an effective legal framework to foster Open Finance in Europe.

The Data Economy and Opportunities for Innovation

The data economy thrives on seamless exchange across sectors, offering significant potential to drive innovation, particularly in financial services. However, to realize these benefits, the associations emphasize the need for a FiDA framework built on robust and evidence-based foundations.

A balanced framework should:

• Support European competitiveness while delivering clear benefits to citizens and businesses;
• Encourage innovation and ensure security in financial data exchange;
• Protect fundamental rights, particularly around data privacy and security.

Key Recommendations for a Balanced FiDA Framework

1. Market Demand and Cost Assessment

The associations stress the need to strike the right balance between customer value, market demand, and costs for financial institutions. To date, the FiDA impact assessment fails to provide conclusive evidence of tangible customer benefits or significant market demand for data sharing.

2. Data Protection and Security

The emergence of new actors, such as Financial Information Service Providers (FISPs), tasked with handling large volumes of sensitive data, requires rigorous oversight and strict regulation, comparable to that of traditional financial institutions. This is essential to safeguard European citizens' data and mitigate risks to security and privacy.

3. Legal Clarity and Realistic Scope

The current scope of the FiDA framework is seen as too broad, potentially harming competitiveness and data protection. Clear delineation of the types of data covered is necessary, along with adjustments to minimize risks of divergent interpretations among Member States.

Concerns and Collaboration with EU Institutions

Despite improvements made by the European Parliament and the Council in their respective positions, critical issues remain unaddressed:

• Insufficient guarantees for personal data protection;
• Potential adverse effects on the competitiveness of European financial institutions, diverting resources away from innovation;
• A lack of operational clarity to ensure smooth and harmonized implementation.

The financial sector reaffirms its commitment to collaborate with EU institutions to design a FiDA framework that is well-defined, realistic, and aligned with the EU's strategic priorities. The goal is to ensure the harmonious development of Open Finance in Europe while meeting the needs of both consumers and businesses.

Towards a Balanced and Effective Framework

To ensure the success of the FiDA framework, the associations urge policymakers to take the necessary time to analyze its impact on:

• The financial sector’s value chain;
• European citizens’ data protection;
• The competitiveness and innovation of financial actors.

An effective legal framework should provide clear benefits to consumers while maintaining a competitive environment for European financial institutions. This includes tailored rules for new players, such as FISPs, and harmonized legislation across Member States to prevent regulatory fragmentation.

Useful Link:

Read the Joint Position Paper

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