What is Open Finance?
Open Finance represents the next evolution of Open Banking, extending data sharing and third-party access beyond payment accounts to encompass the entire financial services landscape—savings, investments, pensions, insurance, and more.
While Open Banking focuses on current accounts and payments, Open Finance includes everything: your savings accounts, investment portfolios, pension pots, insurance policies, mortgages, and loans. The goal is to give consumers a complete view of their financial lives and enable better, more personalized financial services.
The EU's proposed Financial Data Access (FIDA) regulation will establish a comprehensive Open Finance framework across Europe, expected to be implemented between 2025-2027. Meanwhile, Brazil and Australia are already operating Open Finance ecosystems.
Open Finance vs Open Banking
| Aspect | Open Finance | Open Banking |
|---|---|---|
| Scope | All financial products: savings, investments, pensions, insurance, mortgages | Payment accounts: current accounts, credit cards, basic transactions |
| Data Types | Investment portfolios, pension balances, insurance policies, mortgage details | Account balances, transaction history, payment initiation |
| Regulation (EU) | FIDA - proposed 2023, expected 2025-2027 | PSD2 (2018) - established and operational |
| Use Cases | Holistic financial planning, pension dashboards, wealth management | Account aggregation, budgeting, payments, credit scoring |
Financial Products in Open Finance
Savings & Deposits
Access to savings account balances, interest rates, and term deposit information
Investments
Portfolio holdings, asset allocation, performance data, brokerage accounts
Pensions
Pension pot values, contribution history, projected retirement income
Insurance
Policy details, coverage, claims history for life, health, auto, property
Mortgages
Outstanding balances, payment schedules, interest rates, equity
Consumer Credit
Personal loans, credit cards, overdrafts, BNPL arrangements
Open Finance Use Cases
Holistic Financial Planning
View your complete financial picture—bank accounts, investments, pensions, insurance—in one place for better advice and decisions.
Pension Dashboards
Track all your pension pots from different employers in a single view. See total savings and projected retirement income.
Insurance Comparison
Share existing policy details to get accurate quotes. Switch providers easily when you find better coverage or rates.
Mortgage Affordability
Lenders assess your complete financial health including investments and pensions, not just income and spending.
Wealth Management
Consolidated view of all assets enables better portfolio analysis, rebalancing, and investment recommendations.
Tax Optimization
See all investments and accounts together to optimize ISA allowances, capital gains, and pension contributions.
FIDA: The EU's Open Finance Regulation
The Financial Data Access (FIDA) regulation was proposed by the European Commission in June 2023. It will create a unified framework for sharing financial data beyond banking, covering:
- Investment products and brokerage accounts
- Crypto-assets and digital wallets
- Insurance policies (life, non-life, pensions)
- Occupational and personal pension schemes
- Consumer credit beyond payment accounts
Expected Timeline: Legislative process 2024-2025, implementation 2026-2027
Open Finance Around the World
Open Finance Brasil covers banking, insurance, investments, pensions, and forex
FIDA (Financial Data Access) regulation will extend PSD2 to all financial services
Smart Data initiative; pension dashboards launching as first step toward Open Finance
CDR already covers banking, energy; expanding to telecoms and other sectors
Account Aggregator framework enables consent-based financial data sharing
Open Finance FAQ
What is Open Finance?
Open Finance extends Open Banking principles to all financial products—savings, investments, pensions, insurance, and mortgages. It enables consumers to share their complete financial data with authorized third parties, enabling holistic financial services, better advice, and seamless product switching across the entire financial ecosystem.
What is the difference between Open Finance and Open Banking?
Open Banking focuses on payment accounts (current accounts, credit cards, transactions). Open Finance expands this to ALL financial products including investments, pensions, insurance, and mortgages—giving a complete picture of someone's financial life. Think of Open Banking as chapter one, and Open Finance as the full book.
What is FIDA (Financial Data Access)?
FIDA is the EU's proposed regulation for Open Finance, published in June 2023. It will create a comprehensive framework for sharing data across all financial services—including investments, insurance, pensions, and crypto-assets—building on PSD2's Open Banking foundation. FIDA is expected to be implemented between 2025-2027.
When will Open Finance be available?
It depends on the region. Brazil already has Open Finance live since 2022. The EU's FIDA is expected between 2025-2027. The UK is developing its Smart Data framework with pension dashboards as the first step. Australia's CDR (Consumer Data Right) already covers multiple sectors beyond banking.
Is Open Finance safe?
Yes, Open Finance follows the same security principles as Open Banking: explicit consumer consent, regulated providers, strong authentication, and the right to revoke access at any time. FIDA will include comprehensive data protection requirements aligned with GDPR.
What are Open Finance use cases?
Key use cases include: holistic financial planning (seeing all assets in one view), pension dashboards (tracking all pension pots), insurance comparison and switching, mortgage affordability checks using complete financial data, wealth management consolidation, and tax optimization across investments.
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