In December 2024, the Council of the EU reached an agreement on a proposed framework for access to financial data (FIDA).1 In its position, the Council largely supports the Commission's original proposal and is pursuing a gradual approach to implementing the regulation. The FIDA regulation is currently under review by the European Parliament and the Council of the European Union. Adoption is expected in 2025, with transitional periods to allow businesses and regulators to adapt to the new framework. The first implementation phase will likely start in 2027.
The Financial Data Access regulation is a cornerstone of the European Union's ambitious Digital Finance Strategy.2 Introduced in June 2023, FIDA is set to revolutionize the financial sector by expanding data-sharing frameworks and fostering innovation across various financial services. While the regulation promises significant benefits, its implementation poses substantial challenges for financial institutions. Here, we explore the key aspects of this groundbreaking regulation and its potential impact on consumers, businesses, and the broader EU economy, and delve into the hurdles financial institutions must overcome to comply with its requirements.
What is FIDA?
The FIDA regulation builds on the success of the Payment Services Directive 2 (PSD2), which introduced open banking in Europe, and its further evolutions of PSD3 and PSR. While PSD3 and PSR focus on payment services, FIDA expands the principles of data sharing to a broader range of financial products and services, including investment, insurance, pensions, and more. The regulation is designed to enable secure, efficient, and consumer-controlled access to financial data across the EU.
EU Digital Finance Strategy Framework
FIDA is part of a broader regulatory framework aimed at modernizing Europe’s financial landscape. Key intersections include:
- PSD2, PSD3, PSR: FIDA builds on the PSD2, PSD3 and PSR open banking framework, expanding its principles to encompass all financial sectors.
- GDPR (General Data Protection Regulation): Aligns with GDPR’s stringent data protection standards to ensure lawful and secure data processing.
- MiCA (Markets in Crypto-Assets Regulation): Complements regulatory initiatives in digital assets, creating a holistic approach to digital finance.
Key objectives
FIDA aims to:
- Enhance data sharing: Facilitate safe and efficient data sharing across financial sectors, enabling new business models and innovative services.
- Empower consumers: Provide individuals and businesses with greater control over their financial data, ensuring they can easily grant, manage, and revoke access.
- Strengthen competition: Level the playing field by enabling market entry for fintech and third-party providers.
- Ensure security: Introduce robust safeguards to protect privacy and prevent misuse of financial data.
Core features of the regulation
Broader scope
- Covers data from a wide array of financial services, such as banking, investments, insurance, and pensions, impacting the whole financial industry (banks, insurance companies, wealth and asset managers, credit providers, etc)
- Includes both financial institutions and non-bank providers, fostering a comprehensive open finance ecosystem
Consumer rights
- Ensures consumers can easily manage their data-sharing preferences through standardized interfaces
- Establishes the right to real-time access to machine-readable financial data and introduces a real-time financial data access permission dashboard
Technical standards
- Introduces harmonized Application Programming Interface (API) standards for secure and seamless data transfer
- Standards will be developed in collaboration with entities like the European Banking Authority (EBA)
Governance and oversight
- National regulators and the European Commission will oversee compliance
- Penalties for non-compliance will ensure adherence by data holders and third-party providers
Interoperability and innovation
- Supports the development of advanced financial services, such as robo-advisors and personalized analytics
- Encourages partnerships between traditional financial institutions and fintech companies.
Industry reaction
The financial sector reaction to the draft FIDA regulation has been mixed. During the consultation phase, the key objective of the FIDA proposal - to help develop more innovative financial products and services for customers while allowing customers to have effective control over their financial data - was received positively. However, numerous concerns were also raised, mainly in relation to the scope, implementation costs and data security.
Based on previous experience with overarching EU regulations, we are not expecting fundamental changes to the regulation.
Key challenges and next steps for financial institutions
Legacy systems and their lack of interoperability will present the biggest hurdle for financial institutions when it comes to integrating new technical standards defined by FIDA. Upgrading these systems can be costly and time-consuming and potentially lead to delays in compliance. Financial institutions should adopt an end-to-end approach, from designing and implementing compliant APIs to integrating them with existing systems. Scalable, cloud-based solutions can reduce costs and improve efficiency, ensuring a seamless transition to FIDA compliance.
Further challenges may arise from the varying interpretations of the regulation at the national level, leading to inconsistencies and added complexity in cross-border operations. Existing data structures should be mapped to FIDA-compliant standards and tools for data transformation should be used. Adopting industry-wide standards like ISO 20022 will ensure interoperability and future-proofing of existing systems.
Financial institutions may also encounter increased competition from agile fintech firms and will require significant investments in innovation to remain competitive. Established institutions must develop innovative products and services that leverage open finance data. Strategic partnerships with fintechs can help enhance offerings and create unique value propositions that set financial institutions apart from competitors.
Lastly, developing new products that comply with FIDA can require substantial resources, and established institutions may need to rethink their strategies to remain competitive.
Conclusion
FIDA’s benefits are multiple, from increased control over personal financial data and access to tailored financial products and services for consumers, to enhanced competitiveness in global digital finance markets and accelerated adoption of sustainable financial solutions for the EU economy.
For businesses, FIDA will bring opportunities for innovation in product offerings and new partnerships between traditional firms and fintechs.
As FIDA takes shape, it promises to redefine how financial data is shared and utilized, driving a new era of transparency, innovation, and consumer empowerment in Europe’s financial sector.
FIDA represents a bold step forward in the journey toward open finance, but it is not without its challenges. Financial institutions must navigate a complex web of technical, regulatory, and operational hurdles to comply with the new requirements. However, those that succeed will be well-positioned to thrive in the data-driven economy of the future.
As the saying goes, with great power comes great responsibility. FIDA gives financial institutions the power to unlock the full potential of open finance, but it also demands commitment to innovation, security, and customer-centricity. The road ahead may be challenging, but the rewards—for both institutions and consumers—are well worth the effort.
Stay tuned for updates on the upcoming developments.
How Capco can help
Navigating the complexities of FIDA requires a strategic, holistic approach. Capco can support financial institutions with:
- Regulatory expertise: by providing deep insights into FIDA requirements and helping financial institutions identify their impact and implement them effectively.
- Technical implementation: from API development to system integration, Capco offers end-to-end technical support to ensure compliance.
- Change management: Capco assists in managing organizational change, from training staff to redesigning business processes.
- Innovation and strategy: Capco identifies opportunities for innovation and helps institutions stay competitive in the open finance era.
Contact us to find out more.
References
1 https://finance.ec.europa.eu/digital-finance/framework-financial-data-access_en
2 https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/europe-fit-digital-age/european-data-strategy_en
28 March 2025
Wesselin Kruschev