Open banking and open finance are often treated as the same idea at different stages of maturity. That framing is no longer accurate. The regulatory scope, the participants, and the political stakes have diverged enough that open finance now needs to be understood as its own contest centred on which companies get to sit inside the data-sharing ecosystem.
Two Different Regulatory Schemes
Open banking, as implemented in the EU and UK, is defined by PSD2. It covers payment accounts: balances, transaction histories, and the ability for authorised third parties to initiate payments on a customer’s behalf. PaySpace Magazine has tracked this build-out over several years, from early debates over whether open banking would help or hurt incumbent banks to concrete PSD2 implementations at Klarna, Tink, and HSBC.
Open finance, by contrast, is being built through a separate piece of EU legislation: the Financial Data Access (FiDA) Regulation, first proposed by the European Commission in June 2023. Where PSD2 stops at payment accounts, FiDA’s scope extends to more financial products, i.e. savings and investment accounts, insurance-based investment products, pension rights, non-life insurance, mortgage and loan data, and creditworthiness data used in lending decisions. That is a materially larger set of data categories than anything PSD2 ever addressed, and it pulls in a correspondingly wider set of regulated entities. Think of insurers, pension providers, crypto-asset service providers, and credit rating agencies among them.
FiDA is still moving through the EU legislative process, though. It’s not in the full operational scale yet. The Council reached its General Approach in December 2024. Then trilogue negotiations between Parliament, Council, and Commission began in 2025, and the Parliament’s economic affairs committee has continued refining its position through 2026. Formal adoption is expected around mid-2026, with obligations then phasing in from 2027 as sector-specific data-sharing schemes are established. Industry groups including the European Banking Federation and Insurance Europe have publicly asked co-legislators to slow down and complete a fuller impact assessment before finalising the text, arguing that costs to financial institutions and actual customer demand for data-sharing have not been adequately evidenced.
The Real Divide: Who Gets to Participate
The definitional gap between “payment accounts” and “everything else” is the least interesting part of the open banking to open finance shift. The more consequential question is who is allowed to act as a data recipient under the new regime.
FiDA creates a category of regulated entity called financial information service providers (FISPs), authorised to receive customer financial data with permission. In principle, large technology platforms, those we call BigTech, i.e. Amazon, Apple, Google, Meta, could qualify as FISPs if the eligibility criteria are drawn broadly. Reporting on the EU’s 2026 negotiating dynamics indicates this possibility has become genuinely contested. Some member states, with Germany among the more vocal, have pushed to restrict FISP eligibility to EU-established, regulated financial entities, effectively excluding platforms already designated as gatekeepers under the Digital Markets Act.
The reasoning behind that push is structural and also touches the running debate on European economic and payment sovereignty. If a small number of US platforms become the default interface through which European consumers view and act on their financial data, local banks risk losing the customer relationship even while remaining the underlying data holder. That risk includes deposit stability, cross-selling capacity, and long-term brand relevance. Some concerns are distinct from anything that came up during PSD2’s rollout, which never gave third parties this scale of access to non-payment financial data.
Two broad negotiating outcomes are being discussed for how this resolves. A more permissive version of FiDA would keep FISP eligibility wide, including for large non-EU firms, with lower-friction onboarding and fewer gatekeeper-specific restrictions. A more restrictive version, in turn, would narrow eligibility to EU-established and regulated entities, impose tighter data-purpose limits, and give data-sharing scheme governance stronger enforcement powers. Which version prevails will shape not just compliance obligations but the competitive structure of European retail finance for years.
Why This Matters Beyond Brussels
For UK readers, who are not living in the EU regulatory field anymore, the contrast is worth drawing explicitly. The UK abandoned a FiDA-style single-regime approach in favour of the broader Smart Data framework, which extends open banking-style data portability across sectors on a more staggered, sector-by-sector basis.
The UK’s existing open banking infrastructure gives some sense of scale before any open finance expansion. The ecosystem built around the CMA9 banks has now recorded more than one billion open banking payments and over 100 billion API calls since launch. June 2026 alone produced 2.81 billion API calls — the highest monthly volume on record (per Open Banking Expo). If open finance reaches comparable adoption once it extends into savings, pensions, and insurance data, both the volumes and the stakes around who intermediates them scale accordingly.
The embedded finance angle adds another layer worth watching. Deals like Weavr’s acquisition of Comma, which combined embedded finance infrastructure with open banking capability, hint at where proactive non-bank players are already positioning. FiDA’s eventual scope will determine how far that positioning can extend into products banks have historically considered core to the customer relationship.
Open banking asked whether third parties could move money on a customer’s behalf. Open finance asks something larger: who gets to see, and act on, the fuller picture of a customer’s financial life and whether that role stays inside the regulated financial sector or migrates to platforms that were never built as financial institutions in the first place. That is the question the 2026 FiDA negotiations are actually settling.
FAQ
- What is the difference between open banking and open finance?
Open banking, introduced under PSD2, allows secure sharing of payment account data and payment initiation. Open finance, enabled by the upcoming FiDA Regulation, expands data sharing to savings, investments, pensions, insurance, mortgages, loans, and other financial products. - What is FiDA and when will it take effect?
The Financial Data Access (FiDA) Regulation is the EU’s framework for open finance. Formal adoption is expected in 2026, with implementation beginning in 2027 through phased sector-specific data-sharing schemes. - Who will be able to access financial data under FiDA?
FiDA introduces Financial Information Service Providers (FISPs), which can access customer financial data with consent. EU lawmakers are still debating whether large technology companies such as Amazon, Apple, Google, and Meta should qualify as FISPs. - Does FiDA apply in the UK?
No. The UK is not adopting FiDA. Instead, it is expanding data sharing through its Smart Data framework, building on the country’s existing open banking ecosystem. - Why is FiDA important for banks and consumers?
FiDA could make it easier for consumers to share financial data across multiple products, enabling more personalized services. At the same time, it may reshape competition by determining whether banks or technology platforms become the primary gateway to customers’ financial information.
