Open banking (OB) refers to a new financial ecosystem that provides more choices to individuals and small and mid-size businesses concerning the movement of their money, as well as information between financial institutions. Open banking is already being used in several countries around the world, however, it is yet to be adopted in the United States. Anytime a system becomes more transparent, a potential for abuse occurs, and for open banking, that would be at the API level.
This report contains a definition and description of open banking, its activities, enablers, and cybersecurity, and privacy challenges. This report is not intended to be a promotion of OB within the US but rather a factual description of the technology and how various countries have implemented it.
While the US has not yet developed its own OB ecosystem, many of the necessary components already exist in e-banking and P2P services. Still, more implementation work is needed, and the experiences of other countries that are further ahead in the adoption of OB can be monitored for best practices and lessons learned regarding cybersecurity and privacy. This report describes those experiences.