Report: FiDA an opportunity and threat for Europe’s financial services sector
The forthcoming Financial Data Access regulation is set to become a cornerstone of data-driven innovation in Europe’s financial services sector. That is according to a report from Innopay, commissioned by the Euro Banking Association.
The Financial Data Access (FiDA) regulation is an upcoming European Union (EU) initiative designed to expand the Open Banking concept to a broader ‘Open Finance’ framework. It aims to allow consumers and small businesses to securely share their financial data, such as information on mortgages, investments, and insurance, with authorized Financial Information Service Providers (FISPs).
Building on PSD2, FiDA significantly expands the scope of data access to other financial products, spanning savings, mortgages and other credit agreements, investments, pensions and insurance, and introduces a compensation model for data holders making data on said products accessible. Importantly, it also calls on the industry to take the lead in building shared data access schemes – backed by binding rules and standards to ensure secure and efficient data access.
The framework aims to empower consumers, boost innovation and stimulate competition through open data access across the value chain.
Innopay study
To understand FiDA’s implications for the industry in more detail, the Euro Banking Association commissioned Innopay (a business of Oliver Wyman) to conduct research.
Drawing on insights from over 50 senior executives in 15 countries through interviews, a broad market survey and a series of dedicated workshops, the report captures the strategic implications, potential responses, and practical concerns around the strategic and compliance readiness of the financial sector.
Opportunity or threat?
The report found that industry sentiment on FIDA remains split: 50% of survey respondents see it as a significant source of strategic and business opportunities, while the other 50% view it primarily as a regulatory obligation with potential risks, including customer attrition and revenue loss.
Nonetheless, there are significant potential upsides. Respondents identified key areas where FiDA could deliver value, including:
- Streamlining internal operations and driving efficiencies
- Enhancing risk evaluation capabilities
- Improving existing products and services
- Enabling new business models, such as embedded finance and Banking-as-a-Service (BaaS)
- Monetising data through structured schemes
However, three key challenges were highlighted by industry leaders regarding FIDA implementation:
- 86% of survey respondents cited significant costs as a primary concern
- 57% pointed to tight implementation timelines
- 36% flagged potential scheme fragmentation as a major risk
The value for financial institutions
Financial services executives said that they are worried about financial impact – 60% of survey respondents estimated that FIDA compliance costs could be at least three times higher than those associated with PSD2, with 50% stating costs exceeded €25 million per institution and some reaching up to €150 million or more.
While FIDA raises critical strategic questions for financial institutions, over 80% of institutions remain in the early stages of budget planning.
The risks that come with FiDA
The report also identifies risks that come with the implementation: governance uncertainty, compensation structures and fragmentation across products or markets could delay implementation or undermine the regulation’s benefits.
National and sector-level fragmentation remains a real concern, with over half of respondents expecting widely varying implementations across the EU. Survey respondents are also divided as to whether proactive action is needed to address this looming fragmentation. 50% of respondents indicate that scheme discussions should start now, while the other half is either undecided (35%) or favouring a wait and see approach (15%).
The way forward
Looking ahead, Mounaim Cortet, Vice President at INNOPAY and lead author of the report, said: “While no single ‘right’ strategy exists, industry leaders emphasise the importance of making informed decisions and pursuing strategic no regret moves.”
These moves include ensuring FiDA is aligned with strategy and organisation, investing in a scalable, compliant data infrastructure, participating in collaborative scheme developments, and engaging with established initiatives like the Berlin Group, SEPA SPAA, Giro API.
