1 year of FIDA: Milestones and future directions
In recent years, the importance of EU digital policy has grown exponentially. The EU policymakers have been developing policies and frameworks to support and regulate digital finance, ensuring the stability, security, and inclusiveness of the financial sector while fostering innovation. In this blogpost we will explore how the institutions have progressed on creating a Financial Data Access (FIDA) Regulation. The FIDA Regulation is critical, empowering consumers with real-time control over their data and enhanced access to information. This will open up a world of innovative products tailored to their specific needs, significantly enriching their user experience. This will subsequently stimulate the industry fostering greater innovation potential.
The Commission has come up with the Digital Finance Strategy, which will promote data-driven finance as one of its priorities. In this strategy the Commission stated its intention to put forward a legislative proposal on an open finance framework. The Commission’s stance is reflective of the reality that the financial industry means so much more than just payments, and aims to tackle a critical issue: beyond payments, how can we best empower EU financial sector customers with better control over their data, enabling them to access a wider range of data-driven services?
This is exactly what Insurely aims to achieve: a regulatory framework that supports both customers and industry growth. That’s why we have been engaging with policymakers since the very beginning, using this initiative to achieve a win-win experience for all stakeholders involved.
What is in the Commission proposal?
In June 2023, the Commission proposed a Regulation on a framework for Financial Data Access (FIDA). The Commission got the FIDA proposal right because it's inclusive of both customers’ needs and industry potential: the scope is broad, excluding only sickness and health insurance products. FIDA also mandates that data be made available free of charge, continuously, and in real-time.
At Insurely, we welcome the broad scope, as it paves the way for an equal and unrestricted access to customer data belonging to EU citizens, fostering an environment of data sharing without limitations or discrimination. By providing a wide scope of data sharing, innovations will be unlocked across many financial categories. A true win- win for consumers and industry alike!
FIDA has also introduced an important innovation: authorized Financial Information Service Providers (FISPs). Insurely supports this development, as it allows non-financial institutions to be recognized as trusted and secure sources of information.
But even more importantly, the Commission set the foundations for the operation of Financial Data Schemes to develop data standards and set a framework governing the access to data. We are eager to see how this will be further clarified and specified to enhance its practical implementation.
What happened this year?
At Insurely, we are pleased that the Parliament chose to maintain the broad scope, as reflected in its adopted position following the Commission’s proposal.
Crucially, the Parliament is keen on creating a more level playing field, allowing more companies to enter and compete in the financial data market, while encouraging innovation. After all, it is important that financial services are first and foremost provided by companies that understand risk, know their customers well, and care for their well-being.
Additionally, the Parliament decided on a gradual implementation of the financial data schemes, allowing businesses to gradually adapt to the new regulations. In essence, this bit-by-bit rollout will make new opportunities accessible for everyone.
What more is expected?
With the new Parliament in place, we anticipate that the momentum behind FIDA will be maintained. We look forward to the continuation of the successful work already underway.
In parallel, Member States will continue their work on FIDA, where we expect the most contentious aspects to be the scope, financial data schemes and the treatment of the big digital platforms.
We look forward to the progress by the new Parliament and the upcoming Hungarian Presidency of the Member States’ Council and we are confident that their combined efforts will lead to significant progress and ensure a wide scope of customer data and data schemes that facilitate access to data free of charge and in real time.
This progress is expected to stimulate innovation, drive economic growth, and empower consumers by providing them with more control over their personal data. We look forward to seeing the positive impact these developments will have across the industry and beyond.
As always, please reach out if you’d like to discuss this, or if you have questions regarding open finance in general.
