Understanding Financial Data Access Framework Regulation

What is the Financial Data Access Framework Regulation (FiDA)?

The Financial Data Access (FiDA) framework regulation is a legislative proposal by the European Commission aimed at establishing a standardized approach to financial data access within the European Union. The regulation is designed to foster a competitive digital ecosystem by facilitating secure and efficient data sharing between financial institutions, data users, and other stakeholders in the financial sector. FiDA includes the establishment of a mandatory financial data sharing scheme to govern data access to customer data in line with the Framework for Financial Data Access (FiDA) and other EU rules. These schemes develop common standards for data and technical interfaces, determine the maximum compensation that data holders can charge, establish contractual liability of members, and resolve disputes among scheme members and membership issues. FiDA aims to enhance the economic benefits derived from data-driven innovation, improve the availability of innovative financial products, and promote financial inclusion.

What is FiDA Financial Information?

FiDA financial information encompasses a broad range of customer data held by financial institutions, including data related to payment accounts, mortgage credit agreements, occupational pension schemes, non-life insurance products, and other related financial assets. It is essential to obtain permission from customers to access customer data, and customers must have the ability to manage permissions through tools like permission dashboards. This financial data access framework regulation ensures that data users, such as financial information service providers and account information service providers, have lawful access to such assets to deliver financial information services. Data users are obligated to respect confidentiality, implement security measures, and only process data for specific purposes with the customers’ permission. The regulation also covers data related to digital operational resilience, electronic payments, and crypto assets, ensuring a comprehensive approach to financial data sharing.

Differences Between PSD2 and FiDA

While both the Second Payment Services Directive (PSD2) and FiDA aim to enhance financial data access, they serve different purposes and scopes within the financial sector:

1. Scope: PSD2 primarily focuses on payment services regulation, enabling access to payment accounts data for payment services providers and payment institutions. FiDA, on the other hand, encompasses a wider range of financial information, including insurance-based investment products, mortgage credit agreements, and related financial assets.
2. Objective: PSD2 aims to increase competition in the payment services market by opening access to payment accounts. FiDA’s goal is broader, aiming to foster a competitive digital ecosystem and support ongoing digital transformation across the financial sector.
3. Coverage: PSD2 is specifically concerned with the payment services market, while FiDA includes various financial instruments and services, such as investment firms, health insurance products, and other financial information services.
4. Implementation: PSD2 has already been implemented, leading to the rise of open banking initiatives. FiDA is a legislative proposal that will require significant implementation costs and coordination among various stakeholders.

Is Financial Data Covered Under GDPR?

Yes, financial data is covered under the General Data Protection Regulation (GDPR). GDPR governs data protection and privacy for all individuals within the European Union, including financial data access and sharing. Under GDPR, financial institutions and financial information service providers must ensure that customer data is processed lawfully, transparently, and securely. GDPR mandates obtaining explicit consent from customers before accessing or sharing their financial data, thereby safeguarding customer data and promoting trust in data-driven innovation.

FiDA’s Impact on Financial Data Access

The financial data access framework regulation (FiDA) represents a significant step towards a more integrated and efficient financial sector. By facilitating secure data access and sharing, FiDA will enable new providers to enter the market, encourage the development of innovative financial products, and enhance the loan application process. FiDA introduces new legal obligations on financial institutions acting as data holders and requires financial information service

Key Components of FiDA and customer data

• Data Access: FiDA ensures that financial information service providers and other data users have the necessary access to customer data held by financial institutions, fostering transparency and efficiency in the financial sector.
• Technical Interfaces: The regulation mandates the development of appropriate technical interfaces to facilitate seamless data sharing and access.
• Data Protection: FiDA aligns with GDPR to ensure robust data protection measures, safeguarding the privacy and security of financial data.
• Competent Authorities: The regulation designates competent authorities to oversee compliance and address any disputes related to data access and sharing.
• Economic Benefits: By promoting data-driven innovation, FiDA aims to deliver substantial economic benefits to the financial sector and the broader economy.

Conclusion for FIDA in the financial sector

InvestGlass can significantly enhance CRM systems by ensuring they are compatible with the Financial Data Access (FiDA) regulation. By integrating with InvestGlass, financial institutions can seamlessly participate in financial data sharing schemes, enabling efficient data exchange between data holders and data users. This integration allows financial information service providers to access necessary customer data, facilitating better service delivery and innovation.

InvestGlass supports a wide array of financial business models, including capital markets and credit institutions. Its CRM system is designed to comply with regulations set by the European Data Protection Supervisor and the Digital Operational Resilience Act, ensuring robust data protection and operational resilience. The platform provides an appropriate technical interface for smooth data transactions, aligning with the data access requirements of FiDA.

Furthermore, InvestGlass’s permission dashboard allows financial institutions to manage access to customer data effectively, ensuring compliance with the Data Act and maintaining transparency. The platform supports open finance initiatives, enabling new financial products and services to thrive in a competitive digital ecosystem.

With features like credit rating integration and legal representative management, InvestGlass ensures comprehensive data handling capabilities. It aligns with the European Banking Authority’s standards and facilitates interactions with competent authorities, enhancing regulatory compliance and trust.

InvestGlass also supports digital technologies that streamline processes for payment accounts and credit institutions, enabling seamless data sharing and improving customer experiences. By adopting InvestGlass, financial institutions can navigate the complexities of FiDA and other regulatory frameworks, ensuring compliance and fostering innovation in the financial sector.