FiDA, compliance obligation or opportunity?

What is FiDA?
Financial Data Access (FiDA) introduces an Open Finance framework that is a continuation of the concept of Open Banking (PSD2). It is the prelude to Open Data and refers to the sharing, access and reuse of personal and non-personal data for the purpose of providing a wide range of financial services.

The idea is that data sharing can innovate financial products and services for the benefit of participants, consumers, and businesses. Open Finance is expected to lead to more personalised financial products and better tailored services (for comparing) financial products. However, participants remain in control of their data, as they must give consent before their data can be shared and can withdraw this consent at any time.

How does FiDA work?

Data holder
Participants have the right to electronic access to the data held about them by financial institutions, free of charge..

Data user
 It also grants participants the right to authorise companies or financial institutions of their choice to access this data for the purpose of obtaining services

Data
As a data holder, for example a pension fund, insurer or bank, you are obliged to share data at the request of the participant with the introduction of FiDA. Examples of this are:

• Mortgages, loans and accounts (excluding current accounts as defined in PSD2).
• Savings, investments in financial instruments, insurance-based investment products (IBIPs), crypto assets, real estate, and other financial assets, along with the economic benefits of these assets, including data collected for suitability assessments.
• Pension products.
• Non-life insurance products excluding cover for health and health risks, including information collected for the risk preference and risk appetite and the assessment of the suitability of the insurance product.
• Data used to assess a company’s creditworthiness, provided that it is collected during a loan application.

Compliance is a must
The data holder must make all the requested data available to the customer electronically without undue delay, free of charge, on an ongoing basis and in real time. The data holder must also make the customer’s data available to a data user. To this end, the controller must:

• Make the participant’s data available to the user in a standardised manner and at least of the same quality as the data available to the data holder.
• Ensure secure communication with the data user by maintaining an appropriate level of security when handling and transmitting participant data.
• Ensure that data users prove that they have the participant’s consent to access data held by the data owner.
• Provide customers with an authorisation management dashboard so they can easily review, renew, and revoke authorisations from data users.
• Respect the confidentiality of trade secrets and intellectual property rights when accessing customer data.

Chances
In addition to the obligations, as a financial institution, you can also take advantage of the opportunities that FiDA offers in your role as a data holder.

The financial data shared under FiDA enables you, as well as third-party developers, fintech start-ups, and other parties, to create new financial, investment, and insurance products and services.

This can lead to an increase in innovative product offerings and an improvement in the quality of service to participants, but also provides you with a unique opportunity to be even more relevant to your participants. Access to financial data can lead to more user-centric and personalised services, increasing your participant satisfaction.

It is crucial to consider how relevant you want to remain in the evolving financial landscape. The access to financial data facilitated by FiDA enables new entrants to compete with traditional financial institutions, potentially driving down costs for products offered to customers. This shift intends to foster fair and unbiased competition.

Data protection
The open sharing of financial data introduced by the FiDA framework raises significant security and privacy concerns. You and your IT-suppliers will need to implement effective security measures and comply with current data protection regulations to prevent data breaches and maintain participant trust.

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Want to know more?

Watch the Pensioen Pro webinar on FiDA (in Dutch only) created in partnership with Keylane Life & Pension and featuring insights from PwC. You can also contact our Managing Consultant Niels van Maurik at niels.van.maurik@keylane.com for more information.