Unlocking the Future: Europe’s Move Toward Open Finance

Open Banking allows banks to share customers’ payment account data with third-party providers, enabling services like payment initiation and account aggregation. Open Finance expands this concept to include all financial data — savings, loans, investments, pensions, and insurance — giving customers full control and enabling more personalized and integrated financial services.

The move from Open Banking to Open Finance is currently one of the most discussed trends in financial services — and for a good reason. In Europe, Open Banking began under the PSD2 directive, but the evolution towards Open Finance is taking place on a much larger scale through the proposed Financial Data Access (FiDA) regulation. This shift signals Europe’s vision for the future of finance: not merely opening up payments, but reimagining the entire framework of data-driven financial services. These developments and more will be explored at MPE 2026.

Open Banking began with initiatives like PSD2 in Europe, which required banks to allow third-party providers (TPPs) access to customer payment account data, with the customer’s consent.

Key features of Open Banking:

• Focused on payment accounts (current accounts, debit/credit card transactions).
• Access granted via APIs (Application Programming Interfaces).
• Enabled services like:
  • Aggregating account data in one app.
  • Initiating payments through third-party apps.

Challenges faced:

• Limited to payment accounts — no access to investments, loans, insurance, or pensions.
• Inconsistent API standards across banks.
• Banks had little incentive to improve API quality, as monetization was unclear.
• Adoption by customers was slower than expected.

Open Finance expands beyond Open Banking to include a wider range of financial services. Essentially, it’s about opening up all financial data under customer consent, not just payments.

Components included:

• Savings accounts
• Loans and mortgages
• Investment accounts
• Pension accounts
• Insurance policies

Core objectives:

1. Consumer empowerment: Customers control and share their financial data with providers they trust.
2. Innovation boost: Fintechs and banks can offer more personalized financial advice, budgeting tools, or lending services.
3. Monetization for data holders: Banks can charge for access under reasonable terms, creating incentives to maintain high-quality APIs.
4. Standardization: Harmonized data formats make it easier for third parties to develop interoperable solutions.

• More complete financial picture: Open Finance allows apps to aggregate all financial data, not just bank accounts.
• Better financial products: Fintechs can offer tailored advice, compare products, or even help users optimize investments.
• Sustainability for banks: Monetization models help banks invest in better APIs and services.
• Regulatory alignment: Encourages data security, privacy, and consumer consent across the financial ecosystem.

• Data privacy & security: As financial data sharing expands beyond payments, the volume and sensitivity of accessible information grow exponentially. Protecting consumers from data breaches, misuse, or unauthorized profiling becomes more complex. Strong encryption, secure APIs, and clear consent management frameworks are essential to maintain trust and comply with GDPR principles.
• Regulatory complexity: While FiDA aims to create a unified EU framework, member states may still interpret or enforce aspects of Open Finance differently. This can lead to fragmentation in implementation timelines, compliance standards, and supervisory expectations. Cross-border service providers will need to navigate multiple layers of regulation while maintaining interoperability.
• BigTech involvement & non-EU data sharing: One of the most significant risks in the Open Finance transition is the potential exposure of European financial data to non-EU entities, especially large global tech firms. Even if data is processed lawfully under consent, questions remain about jurisdiction, data residency, and compliance with EU data protection standards once data crosses borders. Ensuring that data flows remain within the EU’s legal and ethical boundaries — or that equivalent safeguards exist abroad — will be crucial to prevent systemic risks and loss of consumer trust.
• Technical readiness: Expanding from Open Banking to Open Finance requires a major technological leap. Financial institutions must develop interoperable APIs, improve data quality, and adopt standard schemas that cover all types of financial products. Smaller banks and legacy systems may struggle to keep pace, potentially creating a two-speed ecosystem where innovation concentrates among more digitally mature players.

Open Banking was the first step — giving controlled access to payment data. Open Finance takes this further, offering a holistic view of all financial data, enabling smarter products, better consumer control, and a more competitive financial ecosystem.