The European Commission’s proposal for a framework on Financial Data Access (FIDA), commonly known as Open Finance, incorporates positive aspects that cooperative banks have been advocating since the public consultation in 2022, in the context of the work of the European Financial Data Sharing Expert Group, and subsequently in a series of EACB Recommendations in March 2023. We see some of these recommendations well reflected in FIDA.
The EACB appreciates the customer-centric approach and the recognition of the value of market-driven mechanisms, such as contractual relationships via schemes. Additionally, many safeguards laid out in the text for the eligibility and transparency of Financial Information Service Providers (FISPs) are noteworthy, just to name a few.
However, despite these positive aspects, FIDA seems to be hastily written in some elements. Others are too complex to be realistically implemented by data holders and data users and easily understood by customers. If PSD2 implementation has been challenging, we find it hard not to anticipate similar difficulties being multiplied for all the financial services and products within FIDA’s scope.
The EACB calls for a prudent and gradual approach concerning the categories of customer data in scope, advocates for a voluntary approach to schemes with a timeline that takes into account the experience of the SPAA scheme, and warns about the complexity of building permission dashboards and the implications of customers’ decisions to withdraw their ‘permission.’
The EACB’s position paper aims to simplify the complex and overly ambitious proposal by providing a way to make open finance achievable.