Is Open Banking compulsory?

22 Apr 2022 By PAYCEC


You'll only utilize Open Banking if you provide a regulated app or website your explicit consent.

It's always up to you.

Open Banking offers the potential to increase existing revenue streams and establish new ones for financial institutions while also broadening their customer base.

It can also build revenue-sharing ecosystems, in which incumbents provide users with third-party-developed services in exchange for a subscription or referral fee.

Level of secure level:

  • In the US: Financial data-sharing has been going on in the United States for a while. However, compared to Open Banking APIs, this has been implemented in a less technically robust and safe manner. Traditionally, regulators have been hesitant to force banks to open up access to their data, but the Consumer Financial Protection Bureau is now aggressively considering Open Banking (CFPB). This procedure will most likely take at least two years to complete, but at the end of it, as in the UK, there may be mandated Open Banking APIs. Parallel to the CFPB's ambitions, banks in the United States are experimenting with premium API techniques.
  • In Australia: The Australian government declared in 2017 that the Consumer Data Right would be implemented (CDR). The CDR's goal is to give consumers (both individuals and corporations) more control and access to their data. In the long run, this should increase competition and encourage the development of new products and services. The Australian government was inspired by Europe's Open Banking system, but went even further. The CDR will become a data-sharing regime for the entire economy, not just the banking sector. Energy and telecommunications are the next target areas after banking. The ACCC, one of the primary regulators in the CDR system, has been developing rules since 2017. Banks have created APIs, with the "Big 4" providing transaction APIs in particular.

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