FIDA: Insurers and banks call for gradual introduction
On the occasion of the meeting of the Council working group on October 25 and the current discussions in the Council of the European Union on the Financial Data Access (FIDA) Regulation, insurers and banks in Germany underscore their critical stance on the EU Commission's draft regulation.
In the view of the associations, FIDA's aim of promoting innovation and competition in the financial sector is not being achieved. The benefit to customers also remains questionable. "At present, it is still unclear whether and to what extent customers will even demand this new data exchange model", said Jörg Asmussen, Chief Executive Officer of the German Insurance Association (GDV). As a result, the effort and costs of implementation are currently disproportionate to the recognisable benefits for consumers.
Together with the German Banking Industry, GDV has drawn up a position paper on open finance. The associations have thereby also reacted to the Hungarian Council Presidency's plans to reach a rapid general direction despite the unresolved issues regarding FIDA.
Scope of application stretches financial companies thin
The German associations are critical of the broad scope and the blanket introduction of data exchange. "Companies are being asked to make considerable investments - to set up new data systems, customer interfaces and dashboards. These resources are then lacking elsewhere in the digital transformation", Asmussen said.
According to the associations, FIDA threatens to prove to be a cumbersome and inefficient set of rules. "Instead of unleashing the promised innovative power, we run the risk of creating a bureaucratic apparatus that blocks economic opportunities," Asmussen warned.
Gradual introduction required
Instead, the financial sector advocates a gradual introduction of FIDA by product category. "A step-by-step approach that focuses on standardised data and products is the only way forward”, Asmussen explained. The associations are also calling for extended and therefore realistic implementation deadlines and flexible review periods in order to do justice to the complexity of the requirements.
Insurers and banks as authors of the position paper also emphasise the importance of a precise definition of data and argue that such definition should focus on raw data. "Data enriched by companies should be exempt from the regulations", Asmussen said. Sensitive data, business secrets and third-party data should not be part of the data exchange. In addition, the requirement to share data in real time should only apply if a clear advantage for customers or data users is evident and technically feasible.
Further legislative process in the final phase
After the European Parliament's Committee on Economic and Monetary Affairs adopted its report in April, it still has to be confirmed by the plenary. The so-called “trilogue negotiations” with the European Commission and the Council of the EU can then begin. Agreement in the Council is expected in November.
GDV has also drawn up a transnational position paper together with the French insurance association, France Assureurs. In this way, the two associations want to contribute their perspectives and concerns to the ongoing negotiations at the European level.
The joint position paper with the German Banking Industry can be downloaded below:
