EFAMA appreciates the opportunity to comment on the European Commission's Targeted consultation on open finance framework and data sharing in the financial sector.
We welcome this initial dialogue toward the establishment of an open finance framework that builds on the lessons learned from PSD2 to facilitate a fairer use and access to high quality data, while also ensuring legal certainty, technology neutrality, and high standards of consumer protection.
To this end, EFAMA members have developed the following recommendations:
- We would support data sharing (subject to the customer's consent) with any third-party firm on a voluntary basis. Should a legal duty to exchange data be considered, it should only apply to data sharing with regulated financial entities to ensure an adequate level of customer protection, including data and information security.
- We encourage the sharing of a well-defined list of "plain" customer data (e.g., on the client’s objectives and needs, knowledge and experience). On the other hand, enhanced data (e.g., on customer’s risk, transaction track record, ability to bear losses, wealth, income, investment horizon) are generated by the financial firm and should therefore remain outside of the scope of the open finance framework.
- If an open data-sharing framework is deployed, it will be key to develop reasonable, market-based compensations that guarantee the fair distribution of operating costs (e.g., for a setting up and maintaining a new, cross-sectoral data-sharing infrastructure, and collecting and processing the data) as well as a reasonable return for these investments.
- We highly support the European Commission's goal to ensure fair and equal access to data based on a true level playing field between data sharing firms and new market players (e.g., Big Tech). It is therefore key that the principle of “same activities, same risks, same rules” applies.
- Similarly, it is key to ensure that there is an overall consistency with other relevant legislative texts that financial entities have to comply with and any restrictions that may arise therefrom. In this regard, we see the high value of having a harmonized rulebook that consolidates the ‘best practice’ of customer protection across all digital financial services markets. This would ensure that consumers enjoy the same level of protection regardless of who they are served by.
- Finally, we are conscious that, in the digital age, inaccurate consumer profile information could have a negative, multiplier impact on retail clients. For this, we note that an automated transfer of customer-profile data between intermediaries should not be in the scope of the open finance framework, as it would not provide essential benefits without posing at the same time very significant risks to consumer protection.