The European Union’s executive arm will propose making banks, insurers and funds share customer data with fintechs in return for payment to spur the development of digital finance in the bloc.
(Bloomberg) — The European Union’s executive arm will propose making banks, insurers and funds share customer data with fintechs in return for payment to spur the development of digital finance in the bloc.
The European Commission will outline the creation of financial data-sharing programs that bring together data holders, data users and consumer organizations, according to a Financial Data Access draft proposal seen by Bloomberg. These would develop technical standards, governance rules, compensation, liability, and dispute resolution to ensure safe data access.
“Data holders such as credit institutions, insurers and other financial institutions holding customer data are not always obliged to enable the access of data users such as fintech companies or financial institutions that provide financial services and develop financial products,” the draft text said.
Firms holding data would be obliged to share it upon request by a customer with companies that are members of the data-sharing programs without undue delay and in real time. This includes information on mortgage terms, credit or savings account balances, investments in financial instruments, cryptoassets, pension rights and the provision of non-life insurance products.
In return, data holders such as banks and insurers could request “reasonable compensation” for the technical work needed to allow sharing, according to the draft text, which is still subject to changes ahead of its expected publication on June 28. For small and medium-sized companies, compensation should only cover the cost of facilitating access.
Customer Control
“The general objective of this proposal is to promote digital transformation and speed up adoption of data-driven business models in the EU financial sector to improve economic outcomes for financial services customers and financial sector firms,” the text said.
The proposal will also aim to ensure effective control for customers over their data. Financial firms holding such information must make it available to them “without undue delay, free of charge, continuously and in real-time.”
The plan is part of the bloc’s efforts to build a data-agile economy by better balancing the flow and wide use of data, while preserving a high level of privacy, security and ethical standards.
The commission declined to comment on the proposal.
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