EBF PAPER

EBF views on Open Finance: towards a fit-for-market approach

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Brussels, 30^th March 2023 – The potential for data-driven innovation in all sectors of the economy is significant. The same applies for the financial sector. Financial institutions are already delivering new services, products and experiences to their customers and data is a key element for this. The sector has gone through the introduction of mandatory data sharing with third parties under the revised Payment Services Directive (PSD2), and organisations are still grappling with the lessons learned from this experience (e.g. the impact that a lack of incentives for all market participants has).

As the European Commission moves forward with its Data Strategy and further sectoral data-sharing initiatives, including Open Finance, there is a need to consider very carefully the approach to be taken so as to boost innovation while ensuring a level playing field and avoiding a fragmented implementation of the Strategy.

Taking into account the current data-sharing landscape, data sharing under Open Finance should be voluntary between market actors, based on market needs and contractual arrangements. It should not introduce any new mandatory data access rights for financial data (as in the case of access to payment account data in PSD2).

Instead, the legal framework pre-announced by the Commission should be one that facilitates the fulfilment of real customer needs by setting out only key principles for all participants, promoting incentives (e.g. compensation) for data sharing and setting strong security and consumer protection provisions (including a fair allocation of liability).

A market-led approach, as described in this paper, would keep the financial sector moving towards an European data economy, while helping avoid further asymmetries with other sectors. It would also be consistent with the recent EU proposals on data sharing (Data Act and Data Governance Act), which, except for a specifically defined set of actors and/or datasets (e.g. IoT data), aim to facilitate voluntary data sharing between firms. As part of the same EU Strategy on Data, the Open Finance Framework should follow a similar approach, thus being a voluntary and facilitating framework.

The EBF also notes the report on Open Finance of the European Commission’s Expert Group on the Financial Data Space and takes the opportunity to comment on some of the views therein.

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For more information please contact:

Alexandra Maniati
Senior Director, Innovation & Cybersecurity, a.maniati@ebf.eu

Liga Semane
Policy Adviser – Innovation & Data, l.semane@ebf.eu

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About the EBF:

The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The federation is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses, and innovators everywhere.