It’s complicated: The EU’s on-again off-again relationship with open finance

Two years ago the European Commission proposed regulating how financial data is shared within the EU. Earlier this week reports suggested that the regulation would be dropped as part of a competitiveness drive. Now the latest indication is that it is still on the Commission’s agenda, meaning that EU firms will need to continue engaging with how it will impact their business.

We were on a break!

The Commission published its draft regulation on financial data access, known as FIDA, in June 2023. At the time the Commission said that a dedicated and harmonised framework for access to financial data is necessary to respond to the needs of the digital economy. FIDA impacts EU firms including banks, insurers, investment firms, asset managers, payments and crypto firms.

Since then the European Parliament and Council have examined FIDA and agreed their respective approaches to the proposal. They were expected to enter trilogue talks with the Commission this year with a view to agreeing a compromise version of the legislation – see our blogpost: Design of EU open finance rules set to move to next stage.

Then, recent reports suggested that the Commission would withdraw the proposal because of the burden and complexity it would introduce for financial service providers. It seemed that, despite the potential benefits of opening up financial data, FIDA was out of sync with the Commission’s aim to simplify the EU’s regulatory framework.

Despite those reports, the final form of the Commission’s work programme for 2025 includes FIDA under the list of pending proposals as opposed to the list of files to be withdrawn. FIDA remains on the table, for now.

The one where finance is opened up

What happens next is up in the air. The future of FIDA has been in the balance. Trilogue talks may be delayed further as the co-legislators reassess their options. Some Member States may want to push for alternative options.

In its original form, FIDA has a wide scope, broad application and ambitious timetable for implementation. The proposal could still be withdrawn or replaced with something more scaled back and more in line with the Commission's competitiveness agenda. Firms are keeping a close eye on developments in case there are more twists to come.