In view of the upcoming EU’s Open Finance initiative, which should aim to bring data sharing and third-party access to a wider range of sectors and products, the EFR has published a Paper on Open Finance in the context of the EU Data Economy.
Sharing of standardised product information increases transparency; improves product comparison as customers assess the benefits of products and services. Open Finance refers just to a small building block within a broader set of legislatives initiatives aimed at implementing the EU’s strategic digital and data agenda for innovation and better services for EU citizens and businesses. A cornerstone of this strategy is to fully reap the benefits of valuable data exchanges and flows amongst all actors within a clearly articulated framework. This is certainly more fruitful than just focusing on Open Finance, the financial sector representing only a part of the European (Data) Economy.
The EFR’s believes that the Commission needs to address persisting challenges by putting a horizontal, cross-sectoral framework in place with specific sectoral add-ons where needed. Establishing robust and ultimately value enhancing principles that govern the access and sharing of data are a leading theme that should be considered holistically.
For any data exchange and data flow to deliver broad-based economy-wide benefits as intended by the Commission, three basic key principles need to be at the core of any future regulatory framework:
- Accessing and sharing of raw data in this context, generally requires the consent of customers. When consent is the lawful basis being relied upon, then full transparency is required, as to how and when such consent can be given or withdrawn.
- Incentives to innovate must be preserved for all market actors by embedding any Open Finance initiative in a horizontal and cross-sectoral framework for a competitive EU Data Economy. Moreover, it must be ensured that costly efforts to enhance and expand the range of products and services through the use of refined data (= inferred data) remain commensurately rewarded.
- Trust in the integrity of the accessed or shared data as well as in any of its further uses needs to be preserved throughout the value chain. Trust is at the core of the customer relationship in financial services and therefore the user must be at the centre of the data framework. This also means that the party working with the data must be able to rely on its integrity and accuracy so it can be used for the benefit of the customer.