Inception to Open Banking

Abstract

“Open banking” is quickly expanding into “open finance” and ultimately will transform into “open data,” encompassing most sectors of the economy. The emergence of this new kind of digital economy raises new complexities stemming from both new legal and regulatory frameworks and legacy ones developed decades before the emergence of nonregulated fintechs in the financial ecosystem, the changing role of the consumer demanding new financial services and products, and the practice of leveraging consumer-produced data to produce new financial services and products, leading to structural gaps in consumer and data protection. Through open banking, consumers are beginning to understand the economic value of their personal data and are trying to gain control over their data. As we transition into data-driven economies built on monetizing the data we generate, policymakers around the world need to consider how best to construct legal and regulatory foundations that encourage the growth of strong open data economies that protects the interests of the consumer. Clear and pragmatic rules of the road governing data-sharing (including data rights and data protection, informed consent, data portability, customer liability, consumer protection, antitrust and competition, data access standards, interoperability, and digital identity) can help ensure not only the responsible sharing of personal financial data but also more resilient open data economies via respect for the rights and interests of the individual.