What is FIDA?

FIDA is a regulation paving the way to open finance and customer data sharing in the financial sphere. It aims to enhance digital transformation with data-driven business models, ensure trust over customer data, and expand the perimeter of data to be shared beyond the payment sector .

When FIDA comes into effect, data holders (financial institutions like banks, insurance companies and investment firms) will be required to share a wide range of customer data (including savings, loans, investments, non-life insurance and pension rights) with data users (or authorized financial information service providers), if customers grant permission.

Data holders will need to implement dashboards that display these customer permissions in real time. FIDA will also make it possible to monetize data sharing via a compensation mechanism.

Customers will benefit from FIDA’s enforced data security framework, retain control over their data, and receive access to a wider range of financial products and services.

What does the future look like under FIDA?

FIDA is set to shape the financial sector by:

• Enabling new data-driven models that transform the industry; 
• Increasing competition among financial players with more entrants and data sharing;
• Allowing players to diversify their product and service offerings based on data and leverage cross and up-selling; and
• Introducing new revenue streams through increased data monetization opportunities. 

FIDA’s successful implementation will depend on:

• Customer trust to share data;
• Data standardization across industries;
• Willingness of actors to share data; and
• Benefits and value propositions for customers. 

What are FIDA’s main changes and challenges?

The main changes and challenges expected for financial players include:

• Providing access to a broad set of data and implementing the required technical interface, such as application programming interfaces (APIs);
• Sharing a broad amount of information to data users upon customer approval;
• Developing customer permission dashboards;
• Defining and implementing proper governance of data management rules and ensuring data protection, privacy and security;
• Tackling increased competition from new players with access to strategic customer data;
• Complying and adhering to financial data access scheme(s); and
• Implementing all required changes within a challenging timeframe. 

In the face of increased competition from new entrants, data users and holders will need to adapt and innovate their product and service offerings. The EU has also excluded gatekeepers from the scope of data users, so that big tech firms like Google, Amazon, Facebook, and Apple will not be able to access customer data via FIDA.

What are the key topics currently under discussion?

Key points under discussion by financial industry actors include:

• Implementation approach: whether a staggered approach versus a big bang approach for implementation is preferable, where the former suggests a gradual expansion of the data scope with different applicability timing depending on the data category; 
• Data scope: definition of FIDA’s scope of customer data impacted, considering the impact on data accuracy and liability. The information proposed to be excluded from the scope are, among others: input data for suitability and appropriateness assessment, third-party data, loan application process data, etc.
• Permission dashboard: customers withdraw/modify permissions of dashboards. The purpose of dashboards is to provide customers with a clear view of permissions they have granted for sharing financial data. Dashboards, managed by data holders and based on the information received from data users, should serve as read-only tools, preventing customers to modify permissions. Preventing modification would ensure compliance and consistency between FIDA and regulations like PSR (Payment Services Regulation), fostering implementation synergies and cost savings. 

What are the concrete next steps?

The European Parliament will follow up on FIDA after the June 2024 election. The European Banking Authority (EBA) will establish a register of authorized financial information service providers and financial data access schemes.

EBA, together with the European Securities and Markets Authority (ESMA) and the European Insurance and Occupational Pensions Authority (EIOPA), will develop regulatory technical standards (RTS) and guidelines.

Financial institutions and actors must begin planning for FIDA, including assessing regulatory requirements, identifying business opportunities, preparing required data and reorganizing internally.

Deloitte provides a comprehensive end-to-end service supporting customers with their FIDA open finance journey, including business activities,   regulatory compliance, IT and data management across all industries.

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