VIDEO | Perhaps overshadowed by what appear to be bigger and more impactful changes within the industry, the Financial Data Access (FiDA) regulation doesn’t get many headlines – but it really should. Regulators are targeting mid to late 2026 for it to come into force, which does not leave market participants a lot of time to get their ducks in a row. At the PostTrade 360° Nordic 2024 conference, Alan Goodrich of ERI dove into what the regulation could mean for the industry in the session titled “FiDA and the future of financial services”.
Goodrich described FiDA as unusual, in that it is “not trying to hold you back and stop you from doing things”. Instead, it is a part of a “broader EU strategy for data” that is pushing for digital transformation” – a transformation that doesn’t seem to be happening quickly enough within the banking sector.
Understandably, not all players are on board the FiDA train. Goodrich revealed that many senior executives from major custodians have called the 2026 deadline “impossible”.
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One key obstacle is the requirement that data be made available in real time. Many custodians are still running on batch systems; to change their core systems from batch to real-time is a big undertaking that would come with prohibitive costs.
From the regulators’ perspective, FiDA should do for securities services what the Payment Services Directive (PSD2) has done for payments. One difference between the two regulations is that FiDA allows data providers to charge for data while PSD2 mandates that data be provided free of charge.
Goodrich does not see this as a big advantage. “Personally, I don’t think that’s the business model that is going to drive it,” he said. “The fees for providing the data are not going to be very high compared to the cost of being able to provide it.” Data providers will have to “find other ways to make money out of the information they are supplying to the market”.
More work to be done
The real-time requirement is one that deserves more specificity. “I wonder what that really means, because you can have data that is made available in real time, but that data is out-of-date,” Goodrich pointed out. “There’s still some work to do in terms of defining what ‘data in real time’ means. Does it mean that the data has to be up-to-date as well as being delivered in real time?”
In implementing FiDA, the biggest challenge could come from untangling the multiple systems that are now in place in many institutions, especially the ones that have embarked on a transformation process. Goodrich described these institutions as having a “legacy spaghetti” comprising a core system and other developments that have been created over the years. In trying to simplify those legacy systems with new fintech solutions, the firms have simply created “a new bowl of spaghetti”, where the difficulty is now getting the new and the old to communicate. “Synchronising data across multiple applications has its challenges,” he stated.
Speaker:
Alan Goodrich, Regional Sales Manager, ERI
Hosted by ERI
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