BRUSSELS — The European Commission has abandoned plans to introduce rules requiring financial institutions to share information with customers and competitors after strong criticism from industry.
According to a document obtained by POLITICO, the Financial Data Access, or FiDA, regulation has been withdrawn as it is “not aligned with Commission’s current objectives” and would introduce a “significant burden and complexity for financial actors” which goes against the EU executive’s goal to simplify rules.
The Commission first proposed the FiDA regulation in June 2023 with the aim of giving individuals more power over their financial data. Under it, financial institutions like banks, money managers and insurers would have had to open up the data vaults that hold their clients’ information.
EU capitals reached an agreement on the Commission’s draft law in December, paving the way for discussions with EU lawmakers to make the proposals a reality. They said the “better data sharing” rules would enable financial players to target consumers with “highly personalised financial products and services.”
But financial lobbyists heavily criticized the proposed rules. In December, six industry associations, representing banks, insurers and asset managers, argued the Commission hadn’t adequately calculated the cost of the proposed rules and that customer and market demand for such data-driven services had not been proven. The group said various key concerns “repeatedly raised” remained “largely unaddressed.”
The bill “is a runaway train speeding ahead with no driver and no brakes,” Florence Lustman, chair of the lobbying group French Insurance Federation, told POLITICO in an interview in September.
Opposition from the financial services sector found sympathy within the French government, which published a note last month, obtained by POLITICO, calling for a “thorough reassessment” of the impact of FiDA on the European economy and “for the text to be adjusted accordingly, if not abandoned altogether.”
The traditional financial services sector was also concerned that the bill would serve to benefit the tech industry by allowing it easy access to people’s investment and savings data — enabling tech firms to offer highly personalized products and leaving the incumbent banks struggling to keep up.
EU lawmakers and governments wanted to make it harder for certain more powerful firms, dubbed “gatekeepers,” to access the data in response to these fears. This would have meant Apple, Amazon, Alphabet, Booking.com, Meta Platforms, ByteDance and Microsoft would have faced stricter rules and checks.
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