EU Council Approves Framework for Accessing Financial Data

Brussels – The EU Council reached an agreement on a proposed framework for Financial Data Access (FIDA) that aims to enable financial institutions to access each other’s customer data.

According to the European Council, improved data sharing would allow market participants to offer consumers highly personalised financial products and services, such as tailored investment opportunities, smoother loan application processes, or lower interest rate products. This initiative seeks to foster a more competitive financial sector and improve access to financial services for consumers, including private individuals and small and medium-sized enterprises (SMEs).

How will the EU ensure customer protection in data sharing?

The EU Council explained that the proposal aims to achieve this by creating harmonised rules on what data can be shared and how it should be shared, while promoting transparency and comparability. It also ensures that data holders are adequately compensated for making their data available. To safeguard fair customer protection, the framework guarantees that customers maintain effective control over their data. Additionally, it empowers the European Supervisory Authorities to issue guidelines to protect against unfair treatment or risks of exclusion.

As outlined by the Council, its position largely supports the European Commission’s original proposal and follows a phased approach to implementing the new regime. It specifies the scope by detailing the particular data sets, products, or sectors that the regulations will apply to, as well as setting a timeline for the data-sharing obligations to take effect.

The EU Council also tightened rules overseeing third-country financial information service providers (FISPs), which are entities permitted to access and utilise customer data to offer services such as financial advice and personal financial management. Furthermore, entities designated as gatekeepers will be subject to strict regulation and oversight to ensure fair competition.