Finance Watch, a non-profit advocating for better financial regulation, has urged European Union co-legislators to strengthen protections in the Financial Data Access (Fida) regulation to prevent Big Tech companies like Google, Apple, Amazon, Facebook and Microsoft from exploiting consumer financial data. The organisation also emphasised the need for fair competition and financial inclusion.

In a position paper on 17 December 2024, Finance Watch raised concerns about the risks posed by granting Big Tech access to sensitive financial data. The paper warns that allowing these companies, which already control vast amounts of personal data, to merge this with financial information could result in discriminatory algorithms that exclude vulnerable individuals from essential services. Finance Watch called for stronger safeguards to prevent such outcomes.

The European Council and the European Parliament have taken different approaches to regulating Big Tech’s data access. The council proposes a strict stance, prohibiting gatekeepers from accessing Fida data unless they pass a rigorous compliance assessment. This measure aims to protect consumers by blocking companies that fail to meet compliance standards from accessing sensitive financial data. In contrast, the European parliament supports a less restrictive approach, suggesting gatekeepers ‘may’ be excluded if they fail to comply, but stops short of mandating exclusion.

Peter Norwood, senior research and advocacy officer at Finance Watch, supported the council’s decision, , “The council’s decision to shut the door on gatekeepers who fail compliance checks is a strong step towards protecting consumers and ensuring fair competition.”

Beyond Big Tech

Finance Watch, however, also warned that the risks extend beyond Big Tech. Without legally binding rules for data use, the paper suggests that all financial institutions, including traditional banks, could misuse consumer data--leading to unfair exclusions from products or aggressive marketing of unsuitable loans and insurance. Finance Watch criticised the council’s reliance on non-binding guidelines for data use, arguing that it leaves consumers exposed to potential harm.

“The council’s position falls flat when it comes to data use perimeter rules, leaving consumers dangerously exposed,” Norwood added. “Opening up consumer data without proper safeguards risks financial exclusion, like people being denied insurance because of data revealing past illnesses.”

Finance Watch’s recommendations focus on ensuring strict compliance checks for gatekeepers, introducing enforceable data use rules, and empowering EU supervisors to consistently enforce protections across member states. The organisation urges EU lawmakers to ensure that Fida protects consumers’ rights and prevents misuse of financial data.

As negotiations for the Fida regulation move to the final stage, Finance Watch has called on co-legislators to act decisively. Without stronger safeguards, Finance Watch warns that the regulation could inadvertently encourage Big Tech dominance, data misuse and increased financial exclusion for vulnerable populations. Finance Watch concluded that without enforceable protections, Fida risks undermining the goals of financial inclusion, consumer rights and fair competition, leaving consumers vulnerable to exploitation.