Swiss Federal Council Steps to Promote Open Finance
On December 16, 2022, the Federal Council held a meeting to discuss open finance developments in Switzerland. If the financial sector does not adequately commit to opening up its interfaces, the Federal Council has directed the Federal Department of Finance (FDF) to present measures by June 2024.
Open finance allows for the exchange of financial data through standardised and secure data interfaces upon the request of clients. This means that someone with accounts at multiple banks could use the app of one of those banks or a Fintech company to manage all of their accounts in one place. Financial data can be automatically combined with other data, such as to calculate an individual's carbon footprint.
In contrast to EU member states, there is currently no legal requirement in Switzerland for financial institutions to make financial data available to third-party providers upon the request of their clients. The Federal Council's February 2022 report on digital finance stated that the need for action to promote and expand open finance should be regularly assessed.
At its meeting on December 16th, the Federal Council discussed the current state and future potential of open finance in Switzerland. It acknowledged the efforts of industry associations and financial institutions in launching promising initiatives in areas such as retirement planning, portfolio management, payment processing, and multi-banking. However, more progress and dedication are needed in terms of opening up data interfaces.
The Federal Council expressed its support for the goals established by the FDF, which provide a framework for their work and aim to enhance the digital autonomy of clients while also fostering innovation and competition in the Swiss financial sector. The Federal Council believes that a market-based approach can be effective.
The Federal Council has directed the FDF to present proposals by June 2024 if the financial industry does not adequately commit to opening up its interfaces. Additionally, the Federal Department of Home Affairs (FDHA) will investigate ways to encourage digital access to retirement data.