It’s no surprise the financial service industry’s move toward open banking may not be the most favorable trend among banks. With data considered under ownership of the customers and not the bank, financial institutions are exposing themselves to market competition, security risks and other threats in the name of enhanced customer service and choice.
In Europe and the U.K., PSD2 and open banking are making data sharing a requirement. In the U.S., however, the regulatory future of an open banking ecosystem is less certain – and according to George Anderson, founder of software firm Ninth Wave, it probably won’t look like PSD2.
“It’s an apples-to-oranges comparison,” he told PYMNTS about the regulatory approach toward open banking in Europe versus the U.S. One of the biggest challenges is the number of financial regulators in the U.S. across which open banking rules would have to coordinate; in the U.K., only two regulatory authorities had to collaborate to implement open banking, while Australia only had one, according to a recent American Banker report.
But market forces dictate that open banking is coming, whether banks like it or not – and whether or not regulators will be able to guide FIs along the way. Sixty percent of consumers surveyed last year by Bain & Co. said they are willing to try a financial product from a technology conglomerate they’re already using, like Amazon, Google or Facebook. Another report from TD Ameritrade found more than one-fifth of consumers agree the biggest impact of technology has been on how they manage their money.
About Ninth Wave
Ninth Wave delivers secure, seamless, and standardized data connectivity to fintechs and financial institutions of all sizes, through a single point of direct integration to a universal suite of open finance APIs. With configurable controls, visibility, and insights into all data sharing and data acquisition connections between aggregators, third-party apps, and internal applications, Ninth Wave empowers financial institutions and their customers with access and oversight to their connected apps, enabling secure data exchange in a holistic and scalable open finance ecosystem. Offering solutions for retail and commercial banks, wealth managers, credit card issuers, tax providers, and more, Ninth Wave provides unparalleled connectivity and universal compatibility to complex information systems, unlocking innovation, potential, and performance for your data. Contact us to learn more about Ninth Wave’s secure data connectivity features. Empowering open finance. At scale, at last.