There has been much discussion of the Open Banking rules announced by the US Consumer Financial Protection Bureau (CFPB). While many support the new regulations, which aim to empower consumers to control their financial services data—allowing when and by whom to use the information—some are concerned about having a centralized decision to determine the rules as opposed to a market-driven solution.
Wise (LSE:WISE), a global Fintech launched as a simple and inexpensive way to move and manage money, providing many banking services, may benefit from these rules. Wise has shared a statement with CI in support of the CFPB’s decision.
Via a spokesperson, Wise shared their opinion:
“The finalized rule from the CFPB on open banking is a crucial step forward in unlocking competitive, affordable financial products for Americans. When consumers have the power to access and use their own data, they can better manage their finances and have more flexibility to find the best services to suit their needs. Additionally, this rule is important for the stability and efficiency of the financial services sector by increasing diversity and innovation across the industry.
At Wise, we believe consumers have a fundamental right to access and control their financial data and understand more about the financial services they choose to work with. As a global technology company we have firsthand experience working closely with regulators and financial institutions around the world to develop open finance frameworks. In fact, Wise was one of the first companies to implement open banking in the UK. We have seen the benefits to consumers, including the ability to access faster, more affordable payments.
Looking ahead, Wise encourages the CFPB to consider expanding the scope of this rule to cover broader financial accounts (such as savings and pension accounts, brokerage accounts, payroll, and more) as well as allow for payment initiation. The CFPB must also ensure frequent and available data-sharing across a wide range of financial services in order to best equip consumers to easily compare fees and product offers. Finally, as next steps on governance for this rule are put in place, we hope these will discourage anti-competitive behavior.
Ultimately, transparency is critical to fostering choice for individuals and we hope these considerations are taken into account as this rule is put into action. While the final rule is a productive move towards Americans holistically owning their own data, there is more to be done.”
The Open Banking movement is global. While some legacy financial services may be worried by more competition and cost comparisons, it will be hard to fight the battle of consumer control of data – whether it comes from governmental dictate or the marketplace.
