Open Finance: Definition and Regulatory Framework

This white paper outlines the concept of Open Finance, defining it as the sharing of personal and non-personal customer data held by financial sector intermediaries with third-party providers. It expands the scope of Open Banking by including a broader range of consumer data, such as credit, investment, and insurance information. The paper discusses the current regulatory framework surrounding Open Finance, particularly focusing on the Financial Data Access (FIDA) regulation, which aims to foster innovation and competition in financial services. FIDA is designed to ensure that data holders provide access to customer data with explicit consent, thereby enhancing the user experience and enabling new financial products and services. The implementation timeline for FIDA is projected for late 2024 or early 2025, with a full operational status expected by late 2026 or early 2027. The paper also examines the potential benefits of Open Finance for both consumers and financial institutions, emphasizing the importance of managing associated risks and challenges.