JOINT STATEMENT
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Financial Data Sharing: Finding a sound approach for an effective Open Finance Framework
Brussels, 9 December 2024: As the European Parliament adopted its position and the Council reached its General Approach, the Association for Financial Markets in Europe (AFME), the European Association of Co-operative Banks (EACB), the European Banking Federation (EBF), the European Fund and Asset Management Association (EFAMA), the European Savings and Retail Banking Group (ESBG), and Insurance Europe call on the co-legislators to deliver on commitments to boost European competitiveness and to avoid concluding the Financial Data Access (FiDA) Regulation before a thorough assessment of its impact across the entire value chain is completed.
To safeguard and boost the competitiveness of the European financial sector, it is essential to ensure an approach that delivers tangible benefits to European citizens while at the same time ensuring that Europe’s financial industry can continue to innovate in a robust and cost-effective manner.
The success of the proposed FiDA framework calls for a more focused and evidence-based approach that delivers clear benefits to European citizens and companies. This necessitates further time for careful scrutiny of its broader and practical impact, both for consumers and industry. Without such an approach, FiDA will not only fall short of its ambition, but also undermine the protection of EU/EEA citizens and the competitiveness of the European financial industry alike.
The financial industry highlights the following recommendations to ensure an effective FiDA framework:
- The framework should balance value for customers, market demand, and costs for financial institutions prior to implementation. It is noted that in the impact assessment for the proposed legislation the costs have not been adequately assessed, nor has customer and market demand for data sharing been evidenced. The FiDA framework needs to be driven by demonstrated evidence of benefits to customers and market demand, as otherwise it risks undermining the competitiveness of financial institutions operating in the EU/EEA, by diverting resources from innovation plans, including from areas where FiDA can be successful.
- As FiDA creates new entities (financial information service providers – FISPs) that will be on the receiving end of large quantities of sensitive customer data, implications for data security and privacy need to be carefully considered. This necessitates, at a minimum, robust regulation and supervision of FISPs (to the same standards as those applied to regulated financial institutions), while ensuring the rigorous protection of European companies’ data. These key aspects of data sharing cannot be adequately achieved by the current design of FiDA, therefore creating risks to upholding European citizens’ fundamental right to data protection.
Following the ECON vote and the COREPER mandate for negotiations, and despite some positive improvements introduced in the EP and the Council positions, they remain very broad in scope, particularly in terms of data categories, and do not adequately address the competitiveness and data protection concerns mentioned above. The financial services industry has repeatedly raised these and other key concerns, also proposing relevant solutions, however they remain largely unaddressed.
The financial services industry stands ready to continue contributing to ensure that provides legal clarity and can effectively support the sound development of Open Finance in the EU/EEA.
Signing organisations:
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For more information please contact:
Alexandra Maniati
Senior Director, Innovation & Cybersecurity – a.maniati@ebf.eu
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About the EBF:
The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere.
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]]>EBF POSITION
EBF response to the European Commission Call for Evidence on the Report on the General Data Protection Regulation (Art. 97)
BRUSSELS, 12 February 2024 – This response complements the questionnaire response provided to the European Commission Multi-Stakeholder Expert Group of which the European Banking Federation is a member of. The introduction of the GDPR resulted in a significant increase in the attention for and the application of data protection rules.
The banking sector has a long tradition of compliance and affinity with customer data protection since even before the entry into force of the Directive 95/46/EC. This enduring commitment underscores the industry’s dedication to maintaining the highest standards of data security and privacy for its clients. The principle and risk-based approach of the Regulation remains one of its main benefits and should remain at the core of the GDPR. This is important for banks in light of the many sectoral regulations they have to abide by and for their ongoing digital transformation. However, challenges remain, and we would like to highlight the following general points:
- Ensuring the uniform application and implementation of the GDPR across member states
- Practical consideration of the interplay between the GDPR and other regulations, including at the sectoral level
- Preserving the risk-based approach of the GDPR.
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For more information please contact:
Liga Semane
Senior policy Adviser, Innovation & Data, l.semane@ebf.eu
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About the EBF:
The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere.
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EBF position on the European Commission’s proposal for a Framework for Financial Data Access (FIDA)
BRUSSELS, 11 December 2023 – The EBF recognizes efforts by the European Commission to develop a strong European data economy through initiatives such as the Data Act and Data Governance Act. Under this horizontal framework is the proposed sectoral Regulation on Financial Data Access (FIDA). The proposal aims at promoting data-driven innovation in the financial sector, possibly opening new opportunities for customers while also increasing their control of how and with whom they share data, including through tools such as permission dashboards. Yet the move from open banking to open finance needs very careful consideration, including an appreciation of the potential risks.
We recommend a framework that strikes a balance between mandatory data sharing elements, including the risks, and market-driven elements and sets the right incentives for innovation while maintaining customer trust. We therefore suggest to:
- Set a precise scope, supported by clear definitions.
- Ensure a gradual market-based implementation and roll out of financial data-sharing schemes.
- Clearly define Financial Information Services and strengthen FISP authorisation requirements.
- Clarify roles and responsibilities in the operationalisation of permission dashboards and ensure strong security and fraud protection
- Build on the lessons learned from PSD2, specify the interplay with relevant regulation, and work towards real cross-sectoral data sharing
For more information please contact:
Liga Semane
Policy Adviser, Innovation & Data, l.semane@ebf.eu
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About the EBF:
The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere.
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]]>The post The EBF Annual Data Protection Officers Forum reaches its fourth Edition appeared first on EBF.
]]>EBF Response
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EBF response to European Commission ‘Have Your Say’ Consultation on Financial Data Access Framework proposal
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BRUSSELS, 6 November 2023 – The European Banking Federation responded to the European Commission’s ‘Have Your Say’ consultation on the proposal for a Financial Data Access Framework (FIDA). The EBF emphasizes the need for a measured approach, striking a balance between the mandatory data sharing elements, and the potential risks on the one hand, and the market driven elements on the other. The framework needs to set the right incentives for innovation while maintaining customer trust, especially in light of the broad scope and number of actors in the ecosystem.
We recommend to:
- Set out a precise scope.
- Include a clear, gradual approach for the negotiation and development of data sharing schemes, supported by a realistic timeline that reflects the complexity of the process.
- Clearly define “Financial Information Services” and strengthen FISP authorization requirements.
- Clarify roles and responsibilities in the operationalisation of permissions dashboards and ensure strong security and protection from fraud.
- Take lessons learned from PSD2, specify the interplay with relevant regulation, and work towards real cross-sectoral data sharing.
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For more information:
Alexandra Maniati, Senior Director – Innovation & Cybersecurity, a.maniati@ebf.eu
Liga Semane, Policy Adviser – Data & Innovation, l.semane@ebf.eu
About the EBF:
The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure, and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses, and innovators everywhere.
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EBF shares views on the digital euro, payment services and financial data access proposals
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BRUSSELS, 28 June 2023 – The European Banking Federation (EBF) today shared its reaction to three major digital finance proposals put forward by the European Commission: a legal framework for a digital euro, the Financial Data Access framework and the Revision of EU rules on payment services.
“Today’s proposals touch upon central issues that will significantly affect the future of European financial services. It is crucial to ensure that the European Commission’s vision on digital finance helps enable a competitive ecosystem with a level playing field for all, unlocking new opportunities for users while upholding their safety in complex digital environments,” said EBF CEO, Wim Mijs.
He continued: “The proposal for the digital euro outlines the framework and the legal basis for the European Central Bank’s (ECB) plans for a retail Central Bank Digital Currency (CBDC). It is an essential part of the thorough, democratic and public debate that is necessary for a project of this magnitude, with a potential widespread impact on society and the economy. Alongside the main features of a digital euro, it is important to discuss the broader questions about its added value, how it can best respond to current and future challenges of the European payments market, and how it can be developed jointly with the market.
At the same time, the proposed framework for financial data access needs to be carefully considered in terms of the data in scope, so as to make sure that it responds to actual user and market needs. There are steps in the right direction when it comes to ensuring fair competition between market participants with a fair distribution of value and risk.
Finally, the revision of EU rules on payment services should provide a stable basis for the future development of a successful open banking framework, and rules that enable the fight against the increasing online scams and fraud”.
A legal framework for a digital euro
Today’s proposal lays the ground for the issuance of a retail digital euro. The legislation should find a balance between defining the key characteristics of the digital euro with leaving enough room for the market to develop its distribution. Certainty and clarity on the modalities regarding the holding limits as well as compensation for intermediaries are also needed.
A retail digital euro could – if properly designed – support the strategic autonomy of Europe and ensure a monetary anchor role of the euro. However, to complement the European payments landscape, it must provide a clear added value and be future-proof by design.
It should be understood as a “raw material” that would be issued by the Eurosystem, allowing the industry to develop solutions and fully deploy its innovative potential to deliver competitive payment solutions to the European payments market through a true public-private partnership.
The design of a sustainable business model for the digital euro is vital. It is clear that the costs of building the infrastructure to enable the circulation of the digital euro, and its actual distribution cannot be borne by private actors alone. A harmonized framework of financial incentives should be set up where compensation mechanisms reflect the wider range of necessary actions to be taken by intermediaries.
In addition, to shield banks from the risk of deposit flight and to limit the negative impact on banks’ ability to finance the economy, it is important to set appropriate and firm limits in holdings and transactions.
Read the EBF’s vision on a digital euro ecosystem here.
The Financial Data Access framework
For data-driven innovation to unlock new opportunities for customers, it must be supported by a data-sharing ecosystem that ensures fair competition between market participants with a fair distribution of value and risk. The proposal presented today makes some steps in this direction, notably through including the possibility for financial incentives, but in other areas – such as the introduction of broad mandatory data access rights – the risks are not fully taken into account.
Data sharing should be based on customer and market needs. Introducing new, broad mandatory data access rights without careful cost-benefit analysis of each product or market, and without understanding where the real value for the customer lies, risks introducing further fragmentation in the financial sector when it comes to data sharing.
The possibility of cross-sectoral data sharing should be taken into account to leverage the potential that data from other sectors, with the customers’ permission, holds for developing new products, services and experiences in the financial sector.
We welcome that the proposal sets out key principles on how data could be shared, such as the compensation to make data accessible. Any compensation should reflect the wider range of necessary actions – collection, generation, structuring, preparing and sharing of data – not only the creation and maintenance of infrastructure.
The proposal also leaves room for market-driven initiatives to develop these principles further through data-sharing schemes, which can create a secure environment for data sharing with legal certainty for all actors. Yet feasible timelines are needed for the development of these initiatives.
The introduction of mandatory permission dashboards for customers needs to be carefully considered. Entities included in the scope require the flexibility to define and develop these services by using technologies that better fulfil specific needs.
Read EBF’s paper Open Finance: Towards a fit-for-market approach here.
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Revision of EU rules on payment services
The proposed upgrade of EU payments rules provides some welcome updates and clarifications but does not go far enough in making the essential changes necessary to create a truly successful open banking framework and enable the market to fight scams and fraud in an increasingly complex environment.
Payment Services Regulation and Payment Services Directive 3 will be fundamentally important in ensuring a legislative framework for payments that is in line with market evolution, and fosters an innovative and competitive EU payments market, that needs to be characterised by a level playing field between all providers of payment services.
Fair distribution of value and risk is key in creating an ‘open banking’ framework that corrects the imbalances resulting from the approach taken in PSD2. The principle of compensation should be included in payments legislation too, to ensure alignment with open finance. A key lesson learnt from the PSD2 implementation is that a competitive ecosystem only works when there are benefits for all. The EBF calls to ensure that the reviewed open banking framework provides a stable basis for the future development of a successful open banking framework that at the same time limits the changes needed for implementation.
Finally, prevention of fraud and scams is of utmost importance to banks, with significant initiatives already undertaken on this front. The issue is increasingly important in a context where methods continuously evolve, with new ways to exploit human vulnerabilities and mislead customers. The reviewed legislation should consider this topic broadly, as scams occur outside the payment transaction itself and it is extremely challenging for banks to detect them. Bringing all actors in the relevant areas and in the payments chain such as telecom operators, internet platforms, and parties that participate in the user authentication or payment initiation under adequate and proportionate legal obligations for fraud prevention, detection and mitigation is crucial. The EBF stands ready to participate in further joint efforts with the public sector to enhance consumer awareness, essential in combating authorised push payment scams and fraud.
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For more information please contact:
Rūta Barthet
Senior Media and Communications Officer, r.barthet@ebf.eu
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About the EBF:
The European Banking Federation is the voice of the European banking sector, bringing together 32 national banking associations in Europe that together represent a significant majority of all banking assets in Europe, with 3,500 banks – large and small, wholesale and retail, local and international – while employing approximately two million people. EBF members represent banks that make available loans to the European economy in excess of €20 trillion and that reliably handle more than 400 million payment transactions per day. Launched in 1960, the EBF is committed to a single market for financial services in the European Union and to supporting policies that foster economic growth.
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]]>JOINT STATEMENT
Access to data by public bodies: a double-edge tool to use with caution and restraint
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Brussels, 23 May 2023 – Together with other associations, the EBF has co-signed a statement addressing concerns on Chapter V of the Data Act which covers access to data by public bodies. The statement encourages EU policymakers to take the necessary time to build a clear and proportionate framework that does not allow unrestricted access to any data on vague grounds but will on the contrary protect fundamental rights and the rule of law. The statement recommends that:
- Only public emergencies can give rise to data access. Article 15(c) must be deleted.
- Personal data cannot be in scope. No exceptions.
- Categories of public bodies that can request data must be expressly designated.
- Access requests conditions must be strengthened, with transparency regarding data use and protective measures.
See the full statement and list of signatories:
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About the EBF:
The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere.
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EBF views on Open Finance: towards a fit-for-market approach
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Brussels, 30th March 2023 – The potential for data-driven innovation in all sectors of the economy is significant. The same applies for the financial sector. Financial institutions are already delivering new services, products and experiences to their customers and data is a key element for this. The sector has gone through the introduction of mandatory data sharing with third parties under the revised Payment Services Directive (PSD2), and organisations are still grappling with the lessons learned from this experience (e.g. the impact that a lack of incentives for all market participants has).
As the European Commission moves forward with its Data Strategy and further sectoral data-sharing initiatives, including Open Finance, there is a need to consider very carefully the approach to be taken so as to boost innovation while ensuring a level playing field and avoiding a fragmented implementation of the Strategy.
Taking into account the current data-sharing landscape, data sharing under Open Finance should be voluntary between market actors, based on market needs and contractual arrangements. It should not introduce any new mandatory data access rights for financial data (as in the case of access to payment account data in PSD2).
Instead, the legal framework pre-announced by the Commission should be one that facilitates the fulfilment of real customer needs by setting out only key principles for all participants, promoting incentives (e.g. compensation) for data sharing and setting strong security and consumer protection provisions (including a fair allocation of liability).
A market-led approach, as described in this paper, would keep the financial sector moving towards an European data economy, while helping avoid further asymmetries with other sectors. It would also be consistent with the recent EU proposals on data sharing (Data Act and Data Governance Act), which, except for a specifically defined set of actors and/or datasets (e.g. IoT data), aim to facilitate voluntary data sharing between firms. As part of the same EU Strategy on Data, the Open Finance Framework should follow a similar approach, thus being a voluntary and facilitating framework.
The EBF also notes the report on Open Finance of the European Commission’s Expert Group on the Financial Data Space and takes the opportunity to comment on some of the views therein.
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For more information please contact:
Alexandra Maniati
Senior Director, Innovation & Cybersecurity, a.maniati@ebf.eu
Liga Semane
Policy Adviser – Innovation & Data, l.semane@ebf.eu
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About the EBF:
The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The federation is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses, and innovators everywhere.
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]]>Joint Payments Industry Letter on Final EDPB Guidelines PSD2 GDPR Interplay
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BRUSSELS, 1 February 2022 – The EBF, together with a number of EU payment sector associations, has written to the European Data Protection Board, the European Commission and the European Banking Authority regarding the EDPB Guidelines on the Interaction between PSD2 and GDPR. The letter highlights that while the payments sector remains fully committed to ensuring the protection of EU citizen’s data- including within the framework of PSD2 – there are concerns that the enforcement of the Guidelines will lead to an outcome that is not in line with PSD2 objectives, therefore hindering innovation and competition in payments.
While the final Guidelines help in clarifying certain aspects of the interplay,
- Elements such as the provisions on data minimization raise concern and new uncertainties;
- There is still lack of coherence with the Regulatory Technical Standards on Strong Customer Authentication and Common and Secure Communication (RTS on SCA & CSC);
- There are resulting concerns that national Data Protection Authorities could start taking a differentiated approach to the interpretation of the provisions, resulting in fragmentation across the EU and adding to a growing trend when it comes to GDPR implementation.
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Contacts:
Liga Semane, Policy Adviser, Innovation & Data, l.semane@ebf.eu
Anni Mykkanen, Senior Adviser, Payments & Innovation, a.mykkanen@ebf.eu
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About the EBF:
The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere.
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]]>Data Usage, Access & Sharing in The Digital Economy: EBF Position Paper
BRUSSELS, January 2020 – The European Banking Federation is the voice of the European banking sector, uniting 32 national banking associations in Europe that together represent some 3,500 banks – large and small, wholesale and retail, local and international – employing about two million people. As part of the digital transformation of the banking sector and more broadly of the European economy, the EBF would like to provide its initial assessment and remarks on the current debate around the appropriate milestones for the development of a data-driven economy. The EBF stands ready to provide further support and more detailed recommendations on this issue as necessary. There is widespread consensus that data has become a strategic asset in the digital economy. Data is also one of the key ingredients of Artificial Intelligence and machine learning. Building a European data economy is part of the Digital Single Market strategy. Access to and re-use of data is considered a crucial step towards a competitive EU data economy which will benefit both consumers and EU firms.
The competitiveness of firms thus increasingly depends on timely access to relevant data. On the one hand, the broadest dissemination (through access and sharing) and use of data by the largest number of firms would seem to be desirable; on the other hand, the efficiency of broad data dissemination must be balanced against a number of other important concerns, such as the need to ensure sufficient investment incentives for firms to collect, process and secure data; the need to protect privacy (where sensitive personal data is concerned) and business secrets; and, the possible collusive aspects of data sharing. The issue is unquestionably complex. Although the debate touches upon all the different types of data (personal, non-personal) , this note focuses only on the usage, access and sharing of personal data, most likely the most complex aspect of the discussion.
Media contact:
Liga Semane, Data & Innovation – Policy Adviser – l.semane@ebf.eu
Subscribe to the EBF Weekly + FinReg Agenda
Every Friday at noon you can receive the EBF Weekly + Financial Regulation Agenda. This agenda presents an overview of upcoming European and international meetings and conferences in financial regulation, as well as important general financial and economic events and key EBF meetings for the week ahead. CLICK HERE TO SUBSCRIBE
Subscribe to the EBF Morning Brief
The EBF Morning Brief is published Monday through Friday morning and brings you the top banking headlines, relevant announcements from the EU institutions and the latest from the EBF and its members, national banking associations in 32 countries in Europe. CLICK HERE TO SUBSCRIBE
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