Brussels (Brussels Morning Newspaper) – The EU Council reached an arrangement on a proposed framework for Financial Data Access (FIDA) that seeks to open the access of financial institutions to each other’s customer data.
According to the European Council, better data sharing would authorise market players to target consumers with highly personalised financial products and services, for instance, investment
opportunities, streamlined loan application procedures or lower interest rate products. The effort would develop a more competitive financial sector and enhance consumers’ – in particular private persons and small and medium-sized enterprises (SMEs) – access to finance.
How will the EU ensure customer protection in data sharing?
EU Council stated that the proposal seeks to reach this by introducing harmonised regulations on what data to share and how to share it, promoting transparency and comparability, and ensuring proper compensation for the data holders that make such data available. Meanwhile, to ensure fair customer protection, the new framework would ensure that customers retain effective authority over their data. In addition, it would authorise the European Supervisory Authorities to give guidelines to protect against unfair treatment or exclusion risks.
As reported by the Council, its position largely endorses the Commission’s initial proposal, following a step-by-step process to the implementation of the regime. It describes its scope by defining what specific data sets, products or sectors, these laws should cover and apply to, as well as a timeframe for the data-sharing obligations to kick in.
The EU Council strengthened the rules controlling third-country financial information service providers (FISPs), which are entities that are accepted to access and use customer data to offer services like financial advice and personal financial management. Similarly, entities that are permitted as gatekeepers would be strictly controlled and supervised to ensure fair competition.
