PSD3, PSR & FIDA: The Next Phase of Open Banking
PSD3, PSR & FIDA are set to define the next phase of Open Banking in Europe.
Open Banking in Europe is entering a new phase. PSD2 laid the foundations by enabling access to account information and payment initiation for licensed third parties. This has driven the growth of account aggregation, embedded finance, digital lending and a wide range of data-driven financial services.
As adoption has grown, it has also highlighted where the market needs to evolve. API performance is not always consistent, consent journeys can be complex and the overall experience still varies across countries. These are not failures of Open Banking, but natural growing pains of a rapidly evolving ecosystem.
Why PSD3, PSR & FIDA Are Needed
PSD2 has been a major success in opening the market and enabling innovation. However, practical challenges remain for both banks and fintechs.
Across Europe, API quality still varies significantly between institutions. Some banks offer reliable, high-performance interfaces, while others continue to face downtime, latency or inconsistencies in data. For fintechs operating across multiple markets, this increases integration complexity and operational cost.
At the same time, different interpretations of PSD2 across EU member states have created fragmentation. Consent management, authentication flows and technical standards are not always implemented in the same way, making it harder to deliver a consistent user experience.
Customer journeys also remain a challenge. Multiple redirects, repeated authentication steps and unclear consent messaging often lead to drop-offs. As Open Banking scales, improving usability and trust becomes just as important as regulatory compliance.
How PSD3, PSR & FIDA Will Change Open Banking
The new framework aims to address these challenges by separating the current PSD2 regime into two parts:
PSD3, which will govern authorisation, licensing and supervision
PSR, a directly applicable regulation setting common operational rules across the EU
This distinction is important. Unlike a directive, a regulation applies uniformly across all member states, reducing national differences and helping create a more harmonised market.
Better harmonisation
With PSR applying directly across the EU, banks and fintechs can expect more consistent rules around APIs, consent management and customer protection. This should reduce fragmentation and make it easier to scale services across multiple countries.
Stronger API performance requirements
Future requirements are expected to place greater emphasis on API reliability, availability and performance. Higher uptime expectations, faster response times and improved monitoring will help close the gap between best-performing and weaker implementations.
For fintechs, this could significantly improve stability and conversion rates, while reducing the need for complex fallback mechanisms.
Improved consent management
Customer consent remains central to Open Banking. The new framework is expected to promote clearer, simpler and more transparent consent journeys.
Users should have better visibility over what data is shared, with whom and for how long. Easier consent withdrawal and renewal mechanisms are also expected to improve trust and reduce friction.
Enhanced fraud prevention
PSD3 and PSR are also expected to strengthen fraud prevention measures. This includes better information sharing between payment service providers and broader adoption of IBAN-name verification mechanisms.
These measures aim to improve customer protection while maintaining a smooth payment experience.
PSD3, PSR & FIDA and the Move Toward Open Finance
While PSD3 and PSR focus on improving payment services and Open Banking, FIDA expands the scope toward Open Finance.
FIDA is expected to enable data sharing beyond current accounts, including:
Investments and securities portfolios
Pension products
Insurance policies
Loans and credit products
This broader access to financial data allows providers to build a more complete picture of a customer’s financial situation.
What this unlocks
With a more comprehensive data set, financial institutions and fintechs can deliver more advanced services.
Lenders can improve affordability assessments by considering a wider range of financial obligations and assets. Wealth platforms can provide more personalised advice based on a full financial profile rather than isolated accounts.
For SMEs, the ability to combine banking, lending and operational financial data can improve cash-flow forecasting and decision-making. Consumers, in turn, can benefit from more unified and actionable financial insights.
Open Finance is not a new concept, but FIDA may provide the regulatory structure needed to make it more consistent and scalable across Europe.
What Banks Should Do Now for PSD3, PSR & FIDA
Banks should start preparing early, as the required changes are likely to go beyond simple compliance updates.
Key priorities include:
Improving API reliability and scalability to meet future performance expectations
Simplifying and modernising consent journeys to enhance customer experience
Identifying data sets that may fall under future Open Finance requirements
Strengthening data governance, security and access controls
Institutions that invest early will be better positioned to compete in a more integrated and data-driven ecosystem.
What Fintechs Should Do Now for PSD3, PSR & FIDA
Fintechs also need to look beyond current Open Banking use cases.
This includes:
Designing products that leverage broader financial data sets
Focusing on seamless, user-friendly consent and onboarding experiences
Preparing for cross-product insights combining banking, lending and investments
Working with infrastructure providers that can support future regulatory requirements
Those that adapt early will be able to capture new opportunities as Open Finance evolves.
How finker Helps You Prepare for PSD3, PSR & FIDA
finker supports fintechs and businesses with reliable Open Banking infrastructure and data access.
Our platform enables:
Access to multiple banks through a single API
High-quality transaction data and enrichment
Support for account aggregation and payment initiation
Consistent and scalable connectivity
As the regulatory landscape evolves, we continue to invest in improving connectivity, data quality and readiness for future Open Finance requirements.
The next phase of European financial services is already taking shape.
While the final timetable remains subject to the EU legislative process, PSD3 and PSR are expected to be adopted during 2026, with most requirements applying after a transition period, likely in late 2027 or early 2028. FIDA is expected to follow a similar timeline.
For banks and fintechs, 2026 should therefore be treated as the key preparation year.
Interested in preparing your Open Banking stack for the next generation of European regulation?
Get in touch with the finker team.
