FIDA: When data becomes a competitive advantage
With the Financial Data Access Regulation (FIDA), the European Union is creating the regulatory framework for Open Finance.
In the future, insurance companies will be required to make certain customer data available through standardized interfaces, provided the customer has given prior consent. The aim is to simplify data sharing across the financial and insurance sectors while strengthening customers’ control over their own data.
This brings a key question into focus for insurers: Are customer data across products, business lines, and systems available in a complete, consistent, and unambiguous manner? Because making data available technically requires that it first be correctly identified, consolidated, and managed. FIDA is therefore not only a compliance issue, but also a litmus test for data management in the insurance industry.
The insurance sector is no stranger to regulation. Solvency II, DORA, GDPR: every new requirement brings additional effort. Yet the upcoming Financial Data Access Regulation (FIDA) could have a greater impact than many previous regulatory initiatives. The reason is simple: FIDA is not only about processes or compliance. It concerns the insurance industry's most valuable asset: customer data. The central question is: Can an insurer provide customer data in a complete, correct, up-to-date, and structured format whenever requested? For many organizations, that is more challenging than it may seem.
“The quality of your customer data determines whether FIDA becomes a costly compliance requirement or a strategic competitive advantage.”
Axel Schmale, Senior Account Manager at Uniserv
Why does FIDA require more than new interfaces?
FIDA extends the principle of Open Banking to the entire financial industry. In the future, insurers will be required to provide defined customer data to authorized third parties through standardized interfaces, always subject to customer consent. At the same time, customers will be able to manage and revoke their permissions at any time through digital dashboards.
From a technical perspective, much of the discussion focuses on APIs. But APIs are only the tip of the iceberg. Before data can be shared externally, it must first exist, be identifiable, and be reliable within the organization. This is precisely where the real challenge begins for many insurers.
Why are data silos considered the insurance industry's unresolved legacy?
Historically, insurance landscapes have rarely been homogeneous. For decades, the principle of separating lines of business has led life, health, and property insurance operations to be organized in legally distinct entities. At the same time, different policy administration systems, databases, and processes have emerged.
The result: the same customer often appears multiple times across different data silos. Sometimes with slightly different spellings, sometimes with different addresses, or with incomplete information. As a consequence, a group-wide view of the customer is often missing.
This is precisely where FIDA becomes a challenge. Data sharing is not intended to take place at the level of individual policies, but from the customer's perspective. Once a policyholder grants consent, the relevant data must be made available in a complete and consistent manner. There is simply no alternative.
Why does poor data quality become a compliance issue?
Until now, inaccurate customer data has often been viewed as an internal efficiency problem. Under FIDA, it becomes a regulatory risk.
When duplicate records exist, customer data is outdated, or contracts cannot be clearly assigned, several consequences may arise:
- Incomplete or inaccurate data sharing with authorized third parties
- Increased manual effort when responding to data access requests
- Compliance and reputational risks
- Incorrect decisions in automated processes
- Limited usability of AI and analytics applications
In many cases, organizations lack the ability to cleanse customer and business partner data accurately and assign it to unique identities. Without this foundation, neither a robust Golden Record nor a reliable FIDA architecture can be established.
The well-known principle of “Garbage In, Garbage Out” therefore takes on a new dimension. Organizations that feed poor-quality data into their systems are highly likely to deliver poor-quality data to partners, platforms, and customers as well.
Why do FIDA and AI share the same success factor
Many insurers are currently making significant investments in artificial intelligence. Claims processing, customer service, fraud detection, and next-best-action scenarios are widely regarded as key areas for the future. AI, in particular, depends on a reliable data foundation.
Poor data quality is considered one of the biggest obstacles to data-driven decision-making. At the same time, numerous projects have shown that AI initiatives often fail not because of the algorithms, but because of inconsistent datasets and isolated data silos.
FIDA further reinforces this connection. Insurers that must make their data available to Open Finance ecosystems are simultaneously creating the foundation required for high-performance AI applications.
What should insurers do now
The biggest mistake would be to wait until the final FIDA deadlines come into effect. Instead, insurers should use the remaining time to systematically prepare their data landscape. The following steps are particularly important:
1. Create transparency
Which customer information exists in which systems? Where do data silos, duplicate records, or conflicting datasets exist? Which data is outdated or incomplete?
2. Consolidate customer identities
A reliable Single Customer View is becoming a key prerequisite for FIDA, analytics, and AI. However, data can only be consolidated if it is available in a reliable and consistent form.
3. Ensure data quality over time
Data quality must not be treated as a one-time project. What is needed are automated processes for data validation, duplicate detection, and ongoing data maintenance. It is like rowing against the current: stop rowing, and you drift backward.
4. Consider data protection and role models
Particularly in insurance groups, access rights and authorization concepts must be implemented carefully. While the shared use of master data is possible, sensitive information remains subject to strict legal requirements.
Why high-quality data is becoming the ultimate competitive advantage
FIDA is often viewed as a regulatory IT project. In reality, it is about much more than that. Organizations that have control over their data create the foundation for a better customer experience, more efficient processes, reliable analytics, and new digital business models. Those that do not will struggle to implement FIDA requirements in a cost-effective way. This is exactly where Uniserv comes in.
With its Customer Data Management solutions, Uniserv helps insurers build and maintain reliable customer data over time. By consolidating distributed data sources, creating a Golden Record, and implementing automated data quality processes, organizations establish a solid foundation for FIDA, AI, and data-driven customer processes. In this sense, FIDA can serve as a trigger to address data quality strategically, right now, and turn it into an opportunity for improvement.
FIDA is coming. The key question is not when the first APIs go live. The key question is whether the data behind them is accurate. After all, Open Finance requires open data, but above all, it requires correct data.
Act now instead of fixing issues later
The quality of your customer data will determine whether FIDA becomes a compliance burden or a competitive advantage.
Frequently asked questions about FIDA for insurers that go beyond the basics
Yes. In the future, customers will be able to share their insurance data more easily with comparison, advisory, or switching services. This lowers information barriers and makes insurance offerings more transparent and easier to compare. As a result, retaining existing customers will become more important than ever for insurers.
FIDA does not directly aim to facilitate switching insurers. However, easier access to data may increase customers’ willingness to switch because they can share their policy information more easily for advisory and comparison purposes.
Beyond IT and Compliance, FIDA will particularly impact:
Customer Service
Sales
CRM
Marketing
Data & Analytics
Partner Management
Data Protection
Product Management
The reason is simple: insurers will not only need to make data available, but also manage it in a consistent, transparent, and customer-centric manner.
Yes. Insurers will not only act as data holders, but may also become data users themselves. This creates new opportunities for personalized products, holistic customer advisory services, and data-driven ecosystems. As a result, insurers may expand their role within the Open Finance landscape.
No. Current market approaches largely focus on connecting existing policy administration systems through integration layers, middleware, or virtual customer directories. A complete replacement of core systems is generally not considered a mandatory requirement. However, if core systems are technologically outdated, FIDA may also provide an opportunity to modernize and replace legacy platforms.
In that case, the correct allocation of policies, permissions, and data-sharing authorizations becomes more difficult. Under FIDA, the ability to clearly identify individuals and organizations becomes significantly more important. Duplicate records can compromise the quality of a customer-centric data view.
Both. While the technical implementation will primarily be handled by IT, the real value is created in Sales, Customer Service, CRM, Analytics, and Product Management. Successful insurers will therefore view FIDA not merely as a regulatory requirement, but as a transformation program for data-driven customer processes.
“Can we consolidate all contracts, interactions, and master data related to a customer correctly across all systems, lines of business, and group entities at the push of a button?”
If the answer to this question is not a clear “yes,” there is usually already a need for action today, regardless of when the final FIDA deadlines come into force.
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