Open Finance
GeneralDefinition
Open Finance is the extension of Open Banking-like data sharing and third party access to a wider range of financial sectors and products, such as savings, investments, pensions and insurance. It represents the evolution of Open Banking into a broader financial data ecosystem.
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. While Open Banking focuses on current accounts and payments, Open Finance includes savings, mortgages, pensions, investments, insurance, and more. 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.
Open Finance Products & Data
Savings & Deposits
Access to savings account balances, interest rates, and term deposit information across multiple providers
Investments
Portfolio holdings, asset allocation, investment performance, brokerage accounts
Pensions
Pension pot values, contribution history, projected retirement income across workplace and personal pensions
Insurance
Policy details, coverage information, claims history for life, health, auto, and property insurance
Mortgages
Outstanding balances, payment schedules, interest rates, equity calculations
Consumer Credit
Personal loans, credit cards, overdrafts, buy-now-pay-later arrangements
Open Finance Use Cases
Holistic Financial Planning
Financial advisors and apps can view your complete financial picture - bank accounts, investments, pensions, insurance - in one place to provide better advice.
Pension Dashboards
Track all your pension pots from different employers in one view. See total retirement savings and projected income.
Insurance Comparison & Switching
Share your insurance policy details to get accurate quotes and easily switch providers for better rates.
Mortgage Affordability
Lenders can assess complete financial health including investments and pensions, not just income and spending.
Wealth Management
Consolidated view of all assets enables better portfolio analysis and investment recommendations.
Open Finance vs Open Banking
| aspect | open Finance | open Banking |
|---|---|---|
| Scope | All financial products: savings, investments, pensions, insurance, mortgages, loans | Payment accounts: current accounts, credit cards, basic transactions |
| Data Types | Investment portfolios, pension balances, insurance policies, mortgage details, full financial picture | Account balances, transaction history, payment initiation |
| Regulation (EU) | FIDA (Financial Data Access) - proposed 2023, expected 2025-2027 | PSD2 (2018) - established and operational |
| Use Cases | Holistic financial planning, pension dashboards, insurance comparison, wealth management | Account aggregation, budgeting, payment initiation, credit scoring |
Regulations by Region
EU
FIDA (Financial Data Access) regulation proposed in June 2023. Will create unified framework for sharing financial data beyond banking. Expected implementation 2025-2027.
UK
Smart Data initiative and FCA exploring Open Finance. Pension dashboards launching as first step. UK Finance published Open Finance framework.
Australia
CDR (Consumer Data Right) already covers broader scope including energy and is expanding to other sectors - effectively an Open Finance model.
Brazil
Open Finance Brasil launched 2022, covering insurance, investments, pensions, and foreign exchange alongside banking.
Related Terms
Frequently Asked Questions
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 and advice.
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.
What is FIDA?
FIDA (Financial Data Access) is the EU's proposed regulation for Open Finance. Published in June 2023, it will create a framework for sharing data across all financial services, building on PSD2's Open Banking foundation.
When will Open Finance be available?
It depends on the region. Brazil already has Open Finance live. The EU's FIDA is expected 2025-2027. The UK is developing its Smart Data framework. Australia's CDR 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.
Related Resources
More General Terms
Open Banking Ecosystem
The Open Banking Ecosystem refers to all the elements that facilitate the operation of Open Banking....
Open Banking Services
The Open Banking services provided by Open Banking Limited to Participants, including but not limite...
Participant
An API Provider, API User, ASPSP, or TPP that currently participates in the Open Banking Ecosystem. ...
PSU
Payment Services UserA Payment Services User is a natural or legal person making use of a payment service as a payee, pay...
Smart Data
Smart data is the secure sharing of customer data with authorised third-party providers (TPPs), at t...
SME
Small and Medium-sized EnterprisesSmall and medium-sized enterprises by scale of business, as defined by the CMA, with a turnover less...
Explore More Open Banking Resources
Dive deeper into the Open Banking ecosystem with our comprehensive directories.