Michael Mihailov, co-founder and BDO, and Merdihan Ismailov, CDIO of IRIS Solutions, took part in an expert meeting in the European Parliament on "Open Finance: the backbone of the digital economy", organized by the European Digital Finance Association. IRIS Solutions, as a member of the Bulgarian Fintech Association and representing Bulgaria in the PSD2 working group of EDFA, participated in the discussion of the hottest topics for the future of digital finance with representatives of the European Commission.
At the discussion, it became clear that the next steps in the natural evolution of Open Banking to Open Finance are already being discussed within the European Commission. Jan Ceissens, Head of the Digital Finance Unit at the European Commission, stressed that the results of the Open Banking Study will be the basis for the idea of an open finance ecosystem, where licensed third-party providers such as IRIS Solutions will have the opportunity to reach the consumer's information in various financial institutions such as insurance companies and pension funds, investment firms and intermediaries, tax authorities, etc.
Eric Ducoulombier, responsible for the implementation and development of PSD2, presented the European Commission's views on the ongoing consultations with all stakeholders on the forthcoming update of the Second Payments Directive (PSD2) and the timelines for its implementation. Seven years after its adoption and three years after the entry into force of the Open Banking regulations, enough experience has been gained to move to an upgrade in order to have a much better customer experience and widespread acceptance of open banking by the population. Consultations and results review will continue for the next 12 months and a final version of the PSD2 update proposal is expected in the spring of 2023. Depending on the scope of the changes, a new version of the directive, PSD3, may even be introduced.
During the discussion, the European Digital Finance Association presented a document of its specialized working group with over 40 findings and real proposals for improving the implementation of open banking, which should be considered in the upcoming consultations. Their scope varies from proposals related to changes in regulatory requirements, both to ASPSPs and third-party providers; updates to the requirements of the technical standard and the data received from ASPSPs; to equalization of differences related to the functioning of Open Banking in different European markets and others. Everyone's main goal is to create an open ecosystem that guarantees the most seamless customer experience possible.
In the last part of the program, eight members of the EDFA presented use cases of Open Finance application and how they would contribute to innovation in various business and social life areas of European citizens.
Georgi Penev, director of the Bulgarian Fintech Association, and Merdihan Ismailov CDIO of IRIS Solutions presented a common vision of how Open Finance would help in the field of financial literacy and monitoring the "financial health" of people. It includes a solution for analysis of aggregated data from various financial institutions through artificial intelligence and allows on the basis of this analysis to provide individualized notifications for negative development of the financial condition of the consumer; proposals for increasing their financial education through training and including these indicators in the overall creditworthiness assessment. The proposal is not limited to this, but considers the possibility of using anonymized individual data to improve national and pan-European financial literacy policies. The innovation, which includes the use of Open Finance, will enable national and European institutions, for the first time, to include the use of real data and execute evidence-based policy in the preparation of their strategies, rather than relying entirely on sociological research that has its imperfections.
The presentation of the Bulgarian Fintech Association and IRIS Solutions can be downloaded here:
A video of the event is available HERE.