Open Finance: a huge opportunity for digital transformation

This summary is based on an article by Lydia Linna, originally published by Delano and Paperjam

The ABBL and Deloitte Luxembourg recently conducted a survey addressing concerns related to open finance and the Financial Data Access framework (FIDA) among credit institutions and other financial services providers. FIDA, published by the European Commission in June 2023, extends beyond open banking, encompassing all financial data products such as investments, pensions, insurance, and credits.

The survey revealed that two-thirds of respondents see more challenges than opportunities. Those are linked to data management, IT security, infrastructure readiness and implementation costs.

Ananda Kautz, Head of Innovation, Payments, and Sustainability at the ABBL, emphasizes the need for financial institutions to start preparing for the challenges but also opportunities presented by FIDA, which aims to enhance customer trust and obliges banks to open up their platforms to regulated third parties.

Alexandre Havard, Partner at Deloitte Luxembourg, highlighted the introduction of dashboards under FIDA, allowing consumers to decide what data they want to share.

Despite the regulatory obligations, the study found that banks view FIDA also as an opportunity to consolidate data, offer new services, and gain insights by retrieving information about clients from other players. However, potential risks include the use of financial data by non-financial entities and cybersecurity concerns.

The ABBL and Deloitte aim to raise awareness and facilitate the understanding of FIDA within the financial sector. A recent open finance conference discussed the regulation, emphasizing the need for institutions to position themselves strategically to comply with the evolving landscape.

For more in-depth insights, you can access the full ABBL-Deloitte open finance survey results here.

• FIDA Open Finance Deloitte and ABBL survey – Current state of the Luxembourg market January 2024