December 4, 2024 – The European Council agrees to make consumers’ financial data more accessible. Today, the Council took a significant step toward enabling a more connected and competitive financial sector by agreeing on a proposed framework for Financial Data Access (FIDA) This milestone marks a critical move forward in fostering data sharing between financial institutions, creating opportunities for innovation and improving access to finance for consumers and businesses alike.

A New Era of Financial Data Sharing

The FIDA framework introduced in April of 2024 as part of the coming update to the European Payments Services Directive (PSD3) aims to make financial data beyond just payment account data more accessible across institutions, unlocking the potential for highly personalized financial services. Consumers and businesses, particularly small and medium-sized enterprises (SMEs), stand to benefit from improved access to tailored investment opportunities, faster loan applications, and more competitive products such as lower interest rates.

The agreement introduces harmonized rules around what financial data should be shared, how it should be shared, and compensation for data holders. Clarity, transparency and comparability are key to the success of the new framework, to ensure a level playing field for market participants.

Protecting Consumers in a Data-Driven World

To safeguard consumer interests, FIDA guarantees that customers maintain control over their data. The framework also empowers European Supervisory Authorities to provide guidelines to protect consumers from unfair treatment or exclusion to help reinforce trust in the new data sharing system.

Key Provisions of the Council’s Position

The Council’s agreement aligns closely with the European Commission’s initial proposal but introduces some refinements to ensure practical implementation:

• Scope and Timelines: Specific data sets, sectors, and products are to be clearly defined, with member states being given flexibility in areas like occupational pension data.

• Third-Country Providers: Financial information service providers (FISPs) outside the EU will face stricter rules to ensure fair competition and proper oversight.

• Gatekeeper Regulation: Entities with significant control over customer data are to be closely monitored to prevent market distortions.

Next Steps Toward Finalization

With the Council’s agreement, the next phase of negotiations with the European Parliament is to begin. Once both institutions finalize the legislation, FIDA will be formally adopted and published in the EU’s Official Journal before taking effect.

A Framework for a Digital Financial Future

FIDA is part of a broader effort to modernize the EU’s financial ecosystem. Alongside the Payment Services Regulation (PSR), it seeks to capitalize on the opportunities of digital transformation while addressing its challenges. By promoting data-driven business models, the EU is setting the stage for a more dynamic and inclusive financial sector.

As the legislative process progresses, the spotlight will remain on ensuring that innovation and consumer protection go hand in hand in shaping Europe’s financial future.

Want to learn more? Read how the new PSD3 package impact open banking.