The European Union’s (EU) proposed Financial Data Access (FiDA) regulation was intended to extend “open banking” to a much wider range of financial services data, giving individuals and businesses new rights to share and control their financial information.

Under FiDA, data holders (banks, insurers, pension companies etc.) would be required to make customer data available to authorised users (with consent) via common technical interfaces. The European Commission expected this to empower consumers and SMEs, stimulate innovative services and deepen competition across financial services. It would also introduce safeguards; FiDA would also “aim to ensure consumers and firms have effective control tools over their financial data”¹ and give supervisors tools to prevent unfair exclusion. However, with FiDA’s enactment delayed pending trilogue negotiations, these anticipated benefits and protections are likely to be postponed, with significant implications for consumers and small businesses.

Access to and Control over Financial Data

EEA consumers and small businesses remain limited to accessing data sets covered under the Second Payment Services Directive (PSD2), a narrow subset of payment account and transaction data.

Until FiDA comes into force, individuals and SMEs can only control and share this narrow set of account information. The Commission noted that FiDA would give customers “full control by customers over who accesses their data and for what purpose” but, without FiDA, this broader control framework is on hold. Likewise, the Council stressed FiDA would “guarantee that customers retain effective control”² of their financial data; a delay means that consumers and businesses must rely on disparate bank interfaces or one-off permission models.

Without an EU-wide permission dashboard or harmonised consent mechanism beyond payments, users are left navigating fragmented, provider-specific solutions. While some banks offer proprietary “smart data” exports, these vary widely, forcing individuals and businesses to piece together their financial information manually and postponing the promise of a unified open-data dashboard that would allow seamless granting and revoking of consent across products.

Open Banking and Open Finance Innovation

Charting new products is harder without FiDA. The expectation of FiDA is to catalyse new financial services by unlocking rich customer data. The Commission explicitly predicted that, once implemented, FiDA would enable “more innovative financial products and services” and broaden opportunities for data-driven business models.

The European Banking Federation, in October 2022, warned that the absence of a robust open finance framework in Europe risks “losing out on data-driven innovation and a range of completely new customer experiences”.³

Delays to FiDA are pushing back the rollout of these innovations, as fintechs and banks hold off on launching new apps and services that rely on unified data access until regulatory clarity is clear. As a result, Europe’s open banking evolution remains stalled: innovators lack reliable access to the broader datasets needed to build new products and incumbents face less pressure to develop next-generation analytics and services.

Competition among Financial Service Providers

i) Incumbents maintain data advantage

FiDA was designed to open financial data to a broader range of market participants beyond traditional banks, strengthening competition across the sector. The Commission has argued that it would increase competitive pressure by enabling consumers to switch to and use new providers, while the Council has highlighted that improved data sharing would foster a more competitive financial system, benefiting consumers and particularly SMEs. In practice, this could allow agile new entrants to challenge established lenders and advisers by using customer-permissioned data to offer cheaper loans and more innovative services.

With FiDA on hold, these competitive pressures are significantly reduced. Established banks and insurers continue to retain control over much of customers’ non-payment account data, while new entrants and smaller fintechs struggle to access the comprehensive datasets required to deliver full open-finance offerings. As a result, incumbents maintain their advantage and consumers and SMEs miss out on greater choice and innovation.

ii) Concerns about burdens on industry persist:

The delay may partly reflect industry warnings that, without design changes to better reflect market demand, FiDA could undermine the competitiveness of EU financial institutions, particularly given the absence of “equivalent and reciprocal frameworks in third-country jurisdictions”.⁴ Industry groups have also argued that the significant investment required to establish and maintain data-access systems could limit organisations’ capacity to invest in innovation.

Banks and insurance associations have called for longer timelines and phased scopes to avoid sudden disruption. In essence, industry participants argue that a slower, staged approach would mitigate unintended competitive harm. If policymakers use the delay to extend deadlines, incumbents gain time to adjust, but potential entrants still lack uniform access. In contrast, advisors such as the Parliament’s Financial Services User Group emphasise that open finance can “boost competition” significantly, suggesting that further postponement merely preserves the status quo of limited rivalry, with consumers and SMEs being the losers.⁵

Consumer Protection and Financial Inclusion

i) Safeguards on hold

FiDA was to include rules to protect consumers when sharing data extended beyond banks. The Council stressed the need for rules on compensation and for supervisors (the ESAs) to issue guidelines guarding against unfair exclusion or mistreatment. Consumer groups likewise stressed the importance of strong protections: The European Consumer Organisation (BEUC) notes that while broader data sharing offers benefits, it also “increases the risk of financial exclusion and potentially discrimination” and potential privacy breaches.⁶

In short, FiDA’s delay means any new safeguards it would bring (e.g. a right not to be denied services for refusing to share data) are delayed, and until the regulation is finalised, data sharing remains less regulated, so risks of improper use or exclusion are not addressed by a single EU framework.

ii) Access to finance for households and SMEs is deferred

An important goal of FiDA was financial inclusion: by giving lenders a fuller picture of customers’ finances, loans could be tailored and expanded to underserved groups. The Council specifically noted that improved data sharing would enhance “access to finance” for both private individuals and small and medium-sized enterprises. In practical terms, FiDA can help small businesses obtain credit by allowing alternative data (like non-payment account or insurance asset information) to support lending decisions.  

A delay in adopting the EU’s proposed Financial Data Access (FiDA) regulation is prolonging fragmentation in the financial services market, to the detriment of consumers, SMEs and wider economic growth. FiDA was intended to extend open banking principles across a broad range of financial data, empowering individuals and businesses to control and share their information, stimulating innovation and deepening competition across the EU.

The regulation was widely expected to be finalised and published in Q4 2025; however, this deadline passed without agreement. A subsequent change in the EU Presidency has introduced further procedural delay and there is currently no clear timeline for publication. This absence of political consensus and regulatory certainty exemplifies how political inertia can create market friction.

Strategically, this prolonged uncertainty risks weakening the EU’s position as a global financial services hub, dampening investor confidence and discouraging capital allocation across the European financial sector.

Ultimately, the continued delay of FiDA is stifling competition, investment and growth, with consumers and businesses bearing the consequences.