Open Finance
The EU’s Open Finance project aims to facilitate easier third-parties access to customer financial data. The European Commission seeks to promote product innovation and increase competition in the financial services market. However, Open Finance opens the door to large tech companies from third countries, thereby jeopardising the EU’s strategic autonomy.
Open Finance represents the next stage in the evolution of Open Banking – the practice whereby banks allow third party service providers to access customer’s account data. With its proposed Financial Data Regulation (FiDA), the European Commission is planning a significant expansion: in the future, all data holders across the European financial sector – including asset managers and custodians – would be required to transmit standardised customer data to third party providers, naturally only with the customer’s consent. The EU’s objective is to strengthen competition among financial service providers and with other market participants – particularly from the digital economy, while fostering innovative products and services.
For financial distribution, this could have far-reaching consequences. Large technology companies from third countries, the so called gatekeepers, could gain direct access to EU financial-market data via FiDA and increasingly exert control over distribution channels. In doing so, FiDA would undermine the EU’s strategic autonomy. Despite assurances to the contrary, the regulation will not succeed in keeping the tech giants at bay. Any attempt to do so could provoke retaliatory measures from the US. The sword of Damocles here is Section 899 –punitive taxes on states that discriminate against US companies. The EU can avoid this scenario by withdrawing FiDA.
Moreover, the added value of FiDA is doubtful. Even the opportunities already available under the EU’s PSD2 Directive, which opened bank account data to other payment service providers, are used by only a small number of customers. At the same time, the bureaucratic burden on providers of customer data will continue to rise, while digital companies from third countries reap the economic benefits. FiDA would thus be another blow to the global competitiveness of the European financial industry. For this reason, the European Commission should withdraw FiDA.
Where does FiDA stand now?
The European Commission presented its FiDA proposal in June 2023. The trilogue negotiations between the Commission, Parliament and Council began in January 2025. The agreement targeted for autumn 2025 was not achieved. Key points of contention include the treatment of gatekeepers, the scope of data to be opened, and the governance and financing of data exchange frameworks.