Before and after the implementation of FIDA: The evolving landscape of financial data.

As the financial industry moves toward a more open and transparent data-sharing ecosystem, the Financial Data Access (FIDA) framework represents a major shift in how financial information is accessed and utilized.

While data-sharing services already exist in various forms today, the implementation of FIDA will standardize and regulate these practices, ensuring a more seamless and secure process for consumers and businesses alike. 

Here’s a closer look at the key differences between the pre-FIDA landscape and what we can expect under FIDA.

Pre-FIDA: A fragmented and inconsistent system. 

 In the current pre-FIDA financial system, financial data-sharing services operate in an unregulated and inconsistent manner. While companies like Insurely have made strides in enabling data access through consumer consent, the landscape has been largely disjointed, lacking uniformity and proper oversight. Without clear regulations, financial data sharing has been unpredictable, hindering competitiveness in the market and at times, risky for consumers and businesses alike.

Data sharing in the Pre-FIDA era:

• Companies have been filling gaps in data accessibility due to the absence of a comprehensive regulatory framework, leading to inconsistencies in data availability.
• With no standardized approach, financial data collection varied widely across different markets, creating barriers to effective and secure data use.
• Companies that had early access to certain data sources gained an upper hand, while others were left navigating complex and uncertain regulations.
• In Sweden alone, over 2 million people rely on non-PSD2 data-sharing services annually, meaning sensitive financial data has been exchanged without robust security measures or clear consumer rights.

After the implementation of FIDA: A standardized and regulated framework. 

With FIDA set to be implemented, financial data-sharing practices will enter a new phase of standardization and regulation. The framework prioritizes consumer rights, ensuring that financial data access is more transparent, secure, and efficient across the EU.

Key changes under FIDA:

• The most significant shift under FIDA is that consumers will have the legal right to access and share their financial data, with data holders required to comply with such requests.
• While some well-functioning APIs will streamline data access, there will be variations in the efficiency and performance of APIs depending on implementation and readiness.
• All data users will be regulated under FIDA, meaning that proper security and authentication measures must be in place to ensure safe access to financial data.

The road ahead. 

The transition from the pre-FIDA era to a regulated open finance environment under FIDA marks a defining moment for financial data access in Europe. By prioritizing consumer rights and establishing a secure, standardized framework, FIDA paves the way for enhanced transparency, innovation, and efficiency in financial services.

As companies continue to adapt to these changes, businesses that are proactive in embracing FIDA’s principles will be well-positioned to thrive in this new landscape. At Insurely, we are committed to supporting this transition and ensuring that financial data accessibility remains at the forefront of innovation.

Why the time for FIDA is now. 

The financial data-sharing landscape is currently fragmented, inconsistent, and lacks proper regulation. This creates risks for consumers and businesses while also limiting innovation and competition, which makes it clear that the right time for FIDA is now.

FIDA brings a standardized and regulated framework that ensures transparency, security, and consumer rights, making financial data access more reliable and efficient across the EU. With the rise of open finance and the increasing demand for seamless digital financial services, implementing FIDA now is crucial for enabling a more competitive and innovative financial ecosystem.

Delaying its rollout could see Europe falling behind regions that are rapidly adopting open finance models, putting local businesses at a disadvantage. Businesses that embrace FIDA early will be in a strong position to lead in this new landscape, leveraging secure and standardized data access to improve customer experiences and drive growth.

If you want to know more or discuss FIDA in detail, please reach out.