Which Amendments Have Been Submitted For The EU Open Finance Framework?

February 20, 2024
Members of the European Parliament have shared their views on how the Financial Data Access regulatory framework could be improved ahead of a vote on February 22.

Members of the European Parliament (MEPs) have shared their views on how the Financial Data Access (FIDA) regulatory framework could be improved ahead of a vote on February 22. 

Parliamentarians on the Economic and Monetary Affairs (ECON) committee added a variety of possible changes to the EU’s FIDA proposal, which will see open finance encouraged through regulation in a similar way to open banking before it. 

Ondřej Kovařík, who is also rapporteur for the Payment Service Directive (PSD3), said in one amendment that it “should be noted that the costs of implementation of provisions to enable Open Banking through PSD II were high for the sector, particularly smaller actors”.

“While the Directive has allowed the development of new and innovative offerings to customers, a cost-benefit analysis is essential to ensure that the expansion of Open Banking to Open Finance is not prohibitive to firms, particularly smaller firms.”

Meanwhile, Frances Fitzgerald, an MEP for Ireland, said in an amendment to Recital 7 of the regulation that “to foster efficient data sharing, data holders and data users should make use of existing application programming interfaces infrastructures and common standards as mandated” through PSD2. 

Further, Fitzgerald added an amendment saying that the FIDA permission dashboard “may be combined” with the permission dashboard that is set to be established under the Payment Services Regulation (PSR). 

Another amendment states that customer permissions to give access to his or her data should be obtained through explicit consent, which should not be based solely on a “tick-the-box” approach or the use of generalising phrases. 

According to French MEPs Stephanie Yon-Courtin and Gilles Boyer, in seeking the explicit permission of the customer to use his or her data, the data users should specify what use they intend to make of the customer’s data, should the customer provide permission.

The MEPs, who sit with the centrist Renew wing, also added an amendment saying that the data user should be able to demonstrate how the best interest of the customer “will be served and preserved”. 

Meanwhile, legislators have worked to align the FIDA regulation with the Data Act, which was passed into law last year and aims to facilitate and promote the exchange and use of data within the trading bloc. 

For example, an amendment laid down by Fulvio Martusciello and Herbert Dorfmann, centre-right politicians from Italy, said that in accordance with the Data Act, a firm providing core platform services that has been designated as a gatekeeper under the Digital Markets Act (DMA) should be ineligible as a data user under this regulation.

“The limitation on granting access to gatekeepers would not exclude them from the market and prevent them from offering its services, as voluntary agreements between them and the data holders remain unaffected,” the MEPs suggest. 

Further, the MEPs have said that “it should not be possible for the data user to transfer customer data to a third-party actor without this explicit permission, or even to another entity within the same group”.

However, Fitzgerald, who also sits with the centre-right European People’s Party, said that gatekeepers “should not be ineligible data users” under FIDA. 

Martusciello and Dorfmann have also pushed to remove a section of the original proposal that says that the “customer data included in the scope of this Regulation should include sustainability-related information that should enable customers to more easily access financial services that are aligned with their sustainability preferences and sustainable finance needs, in line with the Commission’s strategy for financing the transition to a sustainable economy”. 

Meanwhile, Fitzgerald added that data required to conduct know your customer (KYC) processes by financial firms, including small and medium-sized enterprises, can be valuable when onboarding new customers, in a bid to get it included in the framework.

“Therefore, the sharing of such data should significantly contribute to lowering barriers to switching providers and therefore result in increased competition and innovation for financial products and services to the benefit of customers,” her amendment says. 

Meanwhile, Ville Niinistö of the European Parliament’s Green faction added an amendment relating to dark patterns. 

“It is essential that consumers know exactly what they are giving their permission for and that their rights under the GDPR apply,” Niinistö says. 

“This information should be provided to consumers in clear and understandable language. To allow consumers to effectively stay in control of their data, the deployment of dark patterns and pre-ticketed boxes in dashboards are prohibited for the purpose of providing permissions to data sharing.” 

FIDA was proposed last year at the same time as other legislation such as the PSR, PSD3 and the Single Currency Package, which provides a legal framework for a possible future digital euro. 

The ECON committee voted through its position on the PSD3 and PSR last week. However, MEPs have said that they are struggling to make progress with plans for the digital euro. 

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