At its meeting on June 19, 2024, the Federal Council received an update from the Federal Department of Finance (FDF) on the recent advancements in open finance within Switzerland.
Currently, the industry’s progress is deemed sufficient, eliminating the need for additional regulatory actions at this time. The FDF will maintain a vigilant watch on the financial sector’s overall progress, adhering to the objectives established by the Federal Council in December 2022.
Open finance involves financial institutions utilizing standardized and secure interfaces to share financial data with other service providers such as fintechs, insurance companies, and banks upon client requests. This allows clients to access innovative products and services, such as consolidating views of bank accounts, investments, retirement assets, or calculating the carbon footprint of financial investments with a simple click.
In contrast to the European Union or the United Kingdom, Swiss financial institutions are not legally mandated to make financial data available to third-party providers. The Federal Council instead relies on the private sector and relevant stakeholders to advance the standardization and opening of interfaces voluntarily. In December 2022, the Federal Council had directed the FDF to propose measures by June 2024 should the financial sector not sufficiently progress in opening its data interfaces.
The Federal Council noted the latest advancements in open finance, highlighted by the multibanking initiative launched in May 2023 through a memorandum of understanding signed by 40 banks. Although not all the Federal Council’s goals for open finance in Switzerland—such as common standards and the scalability of open interfaces—have been fully achieved, the commitment shown by the banking sector indicates no need for government intervention at this point.
The Federal Council’s report on digital finance from February 2022 dictates that the need for measures to support and expand open finance should be regularly assessed, with a final review due by the end of 2025. The FDF will continue to monitor the implementation of the multibanking initiative, the opening of interfaces to non-bank third parties like fintechs, and the engagement of the insurance sector in open finance. Additionally, the multibanking initiative could serve as a model for opening further interfaces, such as those for securities custody accounts, pillar 3a pensions, or within the insurance sector.
The FDF will keep the Federal Council informed of any necessary actions to promote open finance in Switzerland.
Source: fintechnews.ch
