Policy brief
On 18 April 2024, the European Parliament’s Committee on Economic and Monetary Affairs (ECON) voted on the open finance framework – officially called the Financial Data Access Framework (FIDA).
By agreeing a position on this file, the next ECON committee will now be able to hit the ground running and start trilogues when Parliament is back in session after the European elections. The aim of the open finance framework is to enable sharing and third party access to customer data for a wide range of financial sectors and products and builds on open banking which is limited to payment accounts.
Finance Watch, the pan-European NGO advocating to make finance serve society, welcomes most aspects of the text passed in ECON today. The ECON position introduces a number of key improvements to the European Commission proposal on FIDA from 28 June 2023 with regards to ensuring consumers’ data is not misused, which can result in mis-selling, discriminatory price practices, and financial exclusion.
It strengthens the “data use perimeter” rules setting out how a consumer’s personal data can be used in the provision of financial services by introducing legally-binding rules and expanding these rules to cover all essential consumer financial services.
In addition, it explicitly excludes sensitive data from the framework’s scope, and introduces stronger supervision rules of financial data sharing schemes.
Finance Watch regrets, however, that the data use perimeter rules for retail investment products are limited to guidelines instead of legally-binding regulatory technical standards. In addition, while Finance Watch welcomes that the ECON text introduces restrictions and heavy supervisory scrutiny for large bigtech firms (known as ‘gatekeepers’ under the Digital Markets Act), it would have been preferable to totally exclude these entities from scope to protect consumers from the risk of gatekeepers combining FIDA data with their existing hordes of financially irrelevant data.
Peter Norwood, Senior Research & Advocacy Officer at Finance Watch, said:
“The position adopted by ECON today is a huge improvement to the European Commission text, which failed to provide the strong safeguards needed to protect consumers from data misuse. I hope that the Council position incorporates these important enhancements as well to ensure that the considerable risks associated with FIDA are adequately mitigated.”
– Ends –
Notes to Editors:
- For more information on Finance Watch’s position on FIDA, please see the Finance Watch policy brief Citizens are not the product.
- To arrange an interview with Peter Norwood, Senior Research & Advocacy Officer at Finance Watch, please contact Pablo Grandjean at [email protected] or call on +32 (0)474470747
About Finance Watch
Finance Watch is an independently funded public interest association dedicated to making finance work for the good of society. Its mission is to strengthen the voice of society in the reform of financial regulation by conducting advocacy and presenting public interest arguments to lawmakers and the public. Finance Watch’s members include consumer groups, housing associations, trade unions, NGOs, financial experts, academics and other civil society groups that collectively represent a large number of European citizens. Finance Watch’s founding principles state that finance is essential for society in bringing capital to productive use in a transparent and sustainable manner, but that the legitimate pursuit of private interests by the financial industry should not be conducted to the detriment of society.
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