Brussels, 28 June 2023 – The European Commission finally unveiled today its proposal for a Regulation on Financial Data Access (FIDA), which aims to establish a framework mandating data access for licensed financial institutions and financial information service providers (FISPs) to selected customer data sets in the financial sector.
The European Association of Co-operative Banks (EACB) has conducted a preliminary analysis of the proposal and identified both positive and negative aspects based on its recent recommendations on the topic. The EACB welcomes provisions that promote accountability, supervision and transparency, and that establish a level playing field, such as the authorisation requirement for FISPs, and a publicly available central register for authorised FISPs. On the other hand, there are also concerns regarding certain elements of the proposal.
One of the main issues is the broadness of customer data in scope, which includes mortgage, credit, savings account and investment services. Additionally, the proposal mandates continuous and real-time access to customer data, potentially exceeding GDPR requirements. The mandatory nature of financial data sharing schemes, the timeline for implementation and the obligation for data holders to provide permission dashboards also pose questions about voluntary market-oriented approaches. Furthermore, the imposition of a compensation structure based on the lowest prevailing levels in the market will impede the development of effective incentives for innovation.
Taken alongside the Retail Investment Strategy that was released on 24 May and the digital euro proposal, also released on 28 June, the Commission has put forward a set of proposals which together encroach on the commercial space of retail banks such as cooperative banks. Nina Schindler, CEO of the EACB, said “The intrusive nature of these various regulatory packages has the potential to draw already scarce resources away from serving the real needs of cooperative bank customer and members. This is where our traditional strengths lie and our efforts should be”.
The EACB is fully committed to engaging in a constructive dialogue with co-legislators to address the concerns of cooperative banks and restore the balance between enabling the European economy and citizens to benefit from technological development and stifling the retail banking industry in its ability to develop sustainable business propositions for its customers.