28 June 2023

AFME comments on EU Financial Data Access and Payment Services Policy Proposals

“For financial services, both the EU’s proposed FIDA framework and the proposals on PSD/PSR could enable access to new, broader data sets to enhance the way banks operate, encourage innovation across sectors, and support a more effective and efficient payments system...

Commenting on the legislative proposals on Financial Data Access (FIDA) and on Payments Services (review of the Payments Services Directive (PSD) and the new Payment Services Regulation (PSR)) published today by the European Commission, James Kemp, Managing Director at the Association for Financial Markets in Europe (AFME), said:

“For financial services, both the EU’s proposed FIDA framework and the proposals on PSD/PSR could enable access to new, broader data sets to enhance the way banks operate, encourage innovation across sectors, and support a more effective and efficient payments system. AFME welcomes, in particular, the possibility of “reasonable” compensation for data within FIDA, as this is crucial to ensure fair allocation of costs across the data value chain and to safeguard competition. We also believe that compensation should have been introduced in the proposed modification of PSD/PSR.

“However, with innovation comes the potential for unintended consequences, such as sharing data with participants in other sectors who may already have a dominant share of both individual and corporate data, which could lead to monopolies and the exploitation of data. Therefore, AFME has identified four key principles to help address these risks and to support policy makers in the development of a robust FIDA framework and an enhanced payments services system.

“AFME stresses that a level playing field is crucial for participants in the EU data economy. The new proposal includes new data sharing obligations which encompass the majority of customer data held by banks. Imposing

these obligations only on financial institutions could deepen the competitive asymmetry between banks and other participants in the data economy from other sectors which are not subject to equivalent obligations.

“Both pieces of legislation should prioritise interoperability with existing frameworks and an important level of standardisation across sectors. The industry schemes set forward in FIDA will be essential to achieving this interoperability as well as ensuring a level playing field, an appropriate framework for compensation, clear liability standards, and cross-sectoral data standardisation.

“Going forward, it is crucial that both the future FIDA framework and updated PSD/PSR take into account the broad global context of digitisation, ensuring that the EU remains open to global sources of innovation, standards and markets. The EU’s data sharing frameworks should be fair (same rules for all participants), competitive (with clear incentives and reasonable compensation) and safe (include clear liability provisions). These principles are crucial to the development of flexible, future-proof regulation that will support the overall competitiveness and growth of the EU.”

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