EU OPEN FINANCE RULES
The proposed move comes as financial data sharing initiatives continue to gain momentum . Brazil ’ s central bank mandated open finance in 2021 , while Australia ’ s Consumer Data Right reform has enabled enhanced data sharing in the banking and energy sector . The UK – which pioneered open banking regulation in 2017 – is developing an open finance framework through the Data Protection and Digital Information Bill .
Representing the first sector-specific implementation of the European Data Strategy published in 2020 , which identified 14 industries for data sharing initiatives , FIDA will extend data sharing requirements beyond banks to insurers , asset managers and other financial institutions creating opportunities for FinTechs to build new services around customer data .
“ Financial services is one of 14 sectors defined in this data strategy ,” explains Chris Schmitz , Partner at EY-Parthenon and EY EMEIA FinTech Leader . “ As is often the case , financial services is the first sector to undergo such comprehensive data sharing regulation . While the European Commission supports data sharing efforts across other industries , the financial services industry is clearly leading the way .”
Chris says the impact on financial services providers will be substantial . “ Real-time access to data is something that overall , the industry has not experienced so far in that broadness ,” he says . “ Many of the industry players specifically in insurance and asset
“ As is often the case , financial services is the first sector to undergo such comprehensive data sharing regulation ”
CHRIS SCHMITZ , FINTECH LEADER , EY EMEIA
management are not used to providing customer data to third parties in real-time and for sure not over API infrastructures . A substantial amount of financial services players may need to upgrade legacy systems to support real-time data sharing via APIs , which could involve significant investment in technology and staff training .”
TOP 5 TAKEAWAYS
BROADER DATA SHARING MANDATE : FIDA extends datasharing requirements for banks , insurers , pension providers , investment firms and other financial institutions , promoting a more integrated financial ecosystem .
6 January 2025