European Fintech Response to Simplification Proposals for the FIDA
Several European fintech companies have responded formally to the European Commission’s recent proposals aimed at streamlining the FIDA framework.
While generally positive about the Commission’s intentions, industry stakeholders have highlighted concerns that certain provisions might stifle innovation and competitive edge while undermining consumer empowerment.
The fintech sector has expressed support for aligning the FIDA with other regulatory frameworks like the Payment Services Directive (PSD) and the revised version of PSD (PSD3). This includes welcoming improvements in the authorization process for Account Information Service Providers (AISPs) to transition into Financial Information Service Providers (FISPs).
Additionally, there is enthusiasm for high-quality data interfaces that reflect lessons learned from PSD2. Fintechs have backed initiatives that maintain a broad scope of covered data, including information from occupational pension schemes and insurance providers. They also advocate for the voluntary use of European Digital Identity Wallets to foster interoperability.
Industry’s Concerns on Restrictive Provisions
Despite these positive aspects, industry players are cautioning against some restrictive measures included in the proposals. One significant concern is the exclusion of ‘large corporates’ from the customer definition under FIDA. Industry representatives argue that this would go against existing financial regulations and could limit services for this segment.
Another contentious point is the proposed omission of credit rating agencies from the scope, which fintech actors believe could hinder cross-border data access necessary for personal finance management tools. The industry also objects to limiting historical financial data access to just ten years, finding such a restriction unnecessary and inconsistent with current customer availability.
Stakeholders are advocating against the Commission’s preference for a harmonized, centrally imposed API functionality and data standards scheme. Instead, they prefer a market-led approach, citing the success of premium APIs and industry-led initiatives like SEPA Payment Account Access (SPAA) under PSD2.
Furthermore, fintech groups emphasize the need for a customer-centric FIDA that provides continuous, API-based access via user interfaces. They also suggest clarifying the distinction between ‘data access’ and ‘data sharing’ to prevent confidentiality issues.
These adjustments are seen as crucial for enhancing Open Finance in Europe, fostering innovation while safeguarding consumer interests and aligning with broader digital competition objectives.
