An EU overhaul that throws open the doors to banks‘ data comes into force in a matter of days

Banks have long been at an advantage when it comes to data on their customers.

From current accounts to credit cards, established lenders have access to vast amounts of information that financial technology (fintech) competitors could only dream of.

In Europe, that could all be about to change.

This Saturday, banks operating in the European Union will be forced to open up their customer data to third party firms — that is, when customers give consent.

EU lawmakers hope that the introduction of the revised Payment Services Directive (PSD2) will give non-banking firms the chance to compete with banks in the payments business and give consumers more choice over financial products and services.

Britain‘s Competition and Markets Authority (CMA) has set out similar plans to let customers share their data with other banks and third parties. With customer consent, U.K. banks will be required to give authorized third-party firms access to current account data.

Those regulations form part of a conceptual transition known as “open banking.” Under an open banking framework, proponents say, non-banking firms — from corporations as big as and to start-ups — would be able create new financial products by utilizing the data of banks.