Open finance and FIDA, what?

Neonomics
July 10, 2023
4 minutes

Read in Norwegian (original) - Written by Trine Stefferud

Soon enough, Open Banking and PSD2 will be "yesterday's news"!
Get ready for Open Finance and PSD3 😉

The European Commission has published the final draft of the next generation PSD2 regulations this week. What does it mean?

In short, the proposed regulations consist of two parts:

1. Improvements to existing payment service regulations and directives that will become the PSD3/PSR. (Stay tuned for more info on the difference between the PSR and PSD3)
2. A new framework for responsible financial data access (FIDA) to enable "Open Finance"

Open finance and FIDA, what?

Today, the PSD2 directive regulates payment services, including the type of information that banks are required to release to third-party payment service providers, such as Neonomics. The new directive will still regulate this, but it will also cover other industries such as insurance, pensions, investments, and loans.

The big difference is that in the new regulation there will be a framework for responsible financial data access (FIDA) which regulates how and what financial data service providers are allowed to release/obtain through third-party payments and data service providers, like Neonomics.

The regulations will enable businesses and consumers to access personalized financial services tailored to meet their needs. ️It’s important to note that certain types of information will not be accessible in order to protect consumers, for example health, sickness and life insurance.

As a consumer, you can give consent to financial service companies to access to your financial information, in order to provide you with better products, services and offers.

Example: Comparison of insurance services or loans. Here you can consent to give a third-party service provider access to your insurance policy/loan information to compare it against what other companies can offer you to see if you have the right type of insurance/loan to suit your needs or if you are paying more than you need to.

The recommended changes and mandates focus on improving customer experience and trust in data sharing, which will help support more use cases, market adoption and financial inclusion. An example would be that end users would be able to provide a better picture of their finances in order to gain access to better conditions, offers etc. that they would normally never be offered. For example, due to a payment notice.

Read more about the improvements these measures will have here: The next-gen of PSD2 regulations for the EU is here and stay tuned!

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