Europe’s financial services criticise new data exchange rules

Europe’s insurers and financial services players have called for an impact assessment of new open finance rules under the Financial Data Access Regulation (FiDA), after the European Parliament adopted its position last week to pave the way for trilogue negotiations to begin early in 2025. In a joint statement, Insurance Europe and several banking associations said the regulation on data exchange between companies and sectors should not be implemented until a full assessment is completed to measure whether the rules, intended to make customers’ financial data accessible to financial services firms and third parties, delivers benefits to citizens while allowing the sector to continue to be competitive. They said “further time for crucial scrutiny” is needed to assess the impact of the new rules for consumers and industry, based on more evidence, warning that FiDA risks “falling short of its ambition”. It added that the existing impact assessment does not adequately assess costs and has not provided evidence of customer and market demand for data sharing. German insurance association GDV also called for improvements in the FiDA framework, criticising the regulation for tying up firms’ resources – in particular the requirement for real-time data delivery – without any benefit for customers. Legislators argue that better data sharing will allow financial services players to provide access to personalised financial products and services to citizens and SMEs while guaranteeing customers retain control of their data. With support from the Association for Financial Markets in Europe (AFME), the European Association of Co-operative Banks (EACB), the European Banking Federation (EBF), the European Fund and Asset Management Association (EFAMA), and the European Savings and Retail Banking Group (ESBG), Insurance Europe said the exchange of data between sectors “holds the potential to spark data-driven innovation” and deliver new opportunities for customers. But it warns that without more work to understand the impact of the FiDA framework, legislators risk undermining the protection of European citizens and the competitiveness of Europe’s financial sector. The organisations are jointly calling for a framework that balances value for customers, market demand and costs for financial services firms before the rules are implemented. Further, they said financial information service providers, a new sector under FiDA, should be subject to the same regulatory standards and supervision as financial institutions as they can be expected to receive large quantities of sensitive customer data. Insurance Europe and the banking groups said the Parliament and Council positions show some improvements, but it said they remain broad in scope, particularly in terms of data categories, and they do not adequately address their competitiveness and data protection concerns. “The financial services industry has repeatedly raised these and other key concerns, also proposing relevant solutions; however, they remain largely unaddressed,” Insurance Europe said. Jörg Asmussen, general manager of the GDV, also said he has concerns after the Parliament and Council adopted their positions. “Despite the Council’s adjustments, FiDA remains critical. We need a legal framework that brings real benefits to the insured and drives digital transformation… The infrastructure for the provision would be extremely costly and would far exceed the expected benefit,” he said. Asmussen backed the Council’s proposal to phase in the rules by product, but it said the motor sector should not be included in the first phase. Further, he said the GDV wants subsidised private pension products, basic pensions and accident insurance to be excluded from the scope of the rules, with the Council already seeking to exclude occupational pension schemes. “Accident insurance in particular often involves highly sensitive health data. This data must under no circumstances become part of FiDA,” Asmussen said.

Europe’s financial services criticise new data exchange rules

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