European Commission's Annual Work Programme: FIDA Proposal to Be Withdrawn?

The European Commission will publish its Annual Work Programme tomorrow. This document informs the public and other institutions about the Commission’s political commitments, including plans to introduce new initiatives, withdraw pending proposals, and review existing EU legislation.

According to a leaked version I have seen, the Financial Data Access (FIDA) proposal will be withdrawn. The stated reason is that it is not aligned with the Commission’s current objectives. The proposal would introduce significant burdens and complexity for financial actors, contradicting the Commission’s goal of simplification.

On 28 June 2023, the European Commission proposed measures to modernize payments and the financial sector, including a review of the Payment Services Directive (which remains under discussion) and a framework for Financial Data Access (FIDA). FIDA was intended to enable—but not require—individual and business customers (e.g., SMEs) to share financial data that institutions typically collect, store, and process, with data users in a secure, machine-readable format. The goal was to establish clear rights and obligations for managing customer data sharing beyond payments, which are currently addressed under PSD2.

You may recall that I already warned a week ago—when the Competitive Compass was published—that we should be cautious not to use “simplification” as a pretext to block forward-looking initiatives. Policies that complement the Compass and drive Europe toward a more innovative future should be actively supported.

Yet, this is precisely what has happened following criticism from stakeholders and, more recently, from French authorities. French regulators have expressed serious concerns about the FIDA proposal, arguing that while open finance has the potential to benefit users, the regulation could impose disproportionate costs on businesses—far exceeding the estimates in the Commission’s impact assessment. They argue that these costs are unjustified, given the lack of clear use cases.

Additionally, the authorities have raised critical questions about the regulation’s implications for data protection and the EU’s digital sovereignty. They warn that large-scale financial data sharing could expose sensitive information and undermine privacy. Moreover, they argue that FIDA may harm the competitiveness of the European financial sector while introducing unnecessary complexity—again, contradicting the Commission’s stated simplification agenda.

French authorities called for a reassessment of FIDA’s economic impact during the upcoming trialogues, urging either significant revisions or a complete withdrawal of the proposal.

However, according to the leaked work programme, the Commission will first await feedback from the European Parliament and the Council before finalizing this decision.

Finally, one key lesson from my 15 years in financial services—half of which I’ve spent around the Brussels policymaking environment—is that nothing is agreed until everything is agreed. The first step now is to wait for the official press conference and the publication of the final documents tomorrow at around 10:00.

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