From Open Banking to Open Finance: The Framework for Financial Data Access (FiDA)

An article by Xenia Kalogirou, Senior Associate at Elias Neocleous & Co LLC, and published on Lexology, explores the evolution of financial data access from Open Banking to the broader concept of Open Finance within the Framework for Financial Data Access (FiDA). The European Commission’s legislative proposals, including FiDA, aim to modernize the financial sector, foster innovation, and ensure consumer protection. FiDA, an integral part of the EU Digital Finance strategy, extends the ‘Open Banking’ concept from Payment Services Directive (PSD2) to cover various financial services.


The scope of FiDA encompasses a wide range of customer data, spanning credit agreements, investments, insurance, and pension rights. Entities falling under FiDA include credit institutions, investment firms, insurance undertakings, and other financial service providers. The regulation introduces data holders and users, outlining stringent requirements for processing and safeguarding customer data. FiDA also mandates the creation of Financial Data Sharing Schemes (FDSS) to govern data access, set compensation standards, and establish dispute resolution mechanisms. Unlike PSD2, FDSS introduces a compensation model for data sharing.


Financial institutions have shown varying responses, with some complying and others leveraging APIs to provide new financial products and services. The article also highlights the emergence of advanced payment options and services, driven by Open Finance.


The implementation timeline is ambitious, with provisions set to apply 24 months after FiDA’s enactment. However, the complexity of establishing data-sharing agreements and schemes may necessitate a more incremental approach.


For more information, please reach out to Xenia or your usual contact at our firm.