According to a global survey of Open Banking, 90% of companies are considering U.S. expansion following the finalization of new regulations this week. That is among the findings in The Transatlantic Index USA, a report released by Open Banking Excellence (OBE). The publication features insights from Open Banking experts around the world and includes qualitative and quantitative research, such as expert interviews conducted by Oxford University.
The Consumer Financial Protection Bureau’s (CFPB) Personal Financial Data Rights Rule, brought in under Section 1033 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, enshrines consumers with the right of access to their digital financial data and the ability to share it securely with third parties.
Open Banking in the U.S. goes back 25 years and has an estimated 100 million users, but has largely been conducted via ‘screen scraping.’ The use of safer and more reliable APIs is now rapidly underway, thanks in part to the CFPB’s new rules.
Helen Child, founder and CEO of Open Banking Excellence (OBE), said, “This truly showcases the very best of our industry with everyone having an unwavering commitment to drive the economic growth of the sector through inspiring knowledge sharing.
“The Transatlantic Index clearly shows a gigantic market opportunity. When the UK’s expertise in Open Banking, having created the blue-print, is combined with the super-sized U.S. market scale, the effect is transformative. It marks the positive shift of the inflection point that the industry has been working towards.”
Child said the Index is designed to support accessing this massive market, with diverse insights from industry leaders, regulators and academics with a fascinating section on culture.
“Open Banking in the United States stands at a critical juncture,” Pinar Ozcan, Professor of Entrepreneurship and Innovation at Oxford University, said. “Despite substantial market-driven advancements, the impending shift to a more regulated landscape promises both advantages and obstacles. The decentralized nature of U.S. financial regulation, with its intricate interplay of state and federal laws, coupled with a fragmented market structure composed of numerous smaller banks and credit unions, can complicate efforts to establish a cohesive and uniform Open Banking environment.”
“New regulations on personal financial data rights will make certain types of financial data available via the safer method of using APIs. This will accelerate the transition in the U.S. Open Banking away from screen scraping,” said Figen Ceceli, SVP, head of data aggregation product for Fidelity Investments.
