Insight
Regulation and harmonization of the digital financial sector: Promoting innovation and consumer protection in the EU through the FiDA framework
The Framework for financial data access forms the regulatory basis for access to individual and business customer financial data and enables a transition from open banking to open finance. FiDA does this by enabling financial institutions to access, analyze and use financial data to make informed decisions.
It is intended that FiDA will use APIs (Application Programming Interfaces) to enable the secure and efficient exchange of financial data between different systems. These APIs can be provided by banks, financial service providers and other institutions.
In the first step, the data user requests access to the customer's financial data. The customer has a dashboard through which he can control and manage his data permissions. In the second step, the customer gives their financial institution (data holder) permission to access their financial data. In the third step, the data is then transferred from the financial institution (data holder) to the requesting data user via standardized APIs. The DATA USER will then use the data in accordance with the requested purpose (e.g. verification of creditworthiness).
The aim is to create more transparency and control over their data sharing relationships for customers. On the data user side, it is expected that Increased access to key customer data sets would boost innovation.
