Open Banking Excellence (OBE) announced it’s launched a Transatlantic Index USA to benchmark the impact and market opportunity of Open Banking in the US. This comes in light of the Consumer Finance Protection Bureau’s (CFPB) recent 594-page rule mandating open banking with stipulations for consumers and third parties to have digital access to their bank account data.
The US open banking market currently stands at $7.08 billion, according to OBE data. It goes back 25 years and has an estimated c.100 million users, but has largely been conducted via ‘screen scraping’. The use of safer and more reliable Application Programming Interfaces (APIs) is now rapidly underway thanks in part to the CFPB’s new rules.
The Transatlantic Index USA report is a collaboration between Open Banking Excellence (OBE) in collaboration with Oxford University, the British Embassy in Washington D.C., the UK’s Department for Business and Trade, and Financial Data Exchange (FDX), with sponsorship from Fidelity Investments. It is an in-depth, data-driven exploration of the evolving US financial landscape as the world’s largest market accelerates into open banking.
Helen Child, founder and CEO of OBE, said in a statement: “When the UK’s expertise in open banking, having created the blue-print, is combined with the super-sized US market scale, the effect is transformative. It marks the positive shift of the inflection point that the industry has been working towards.”
“Open banking in the United States stands at a critical juncture. Despite substantial market-driven advancements, the impending shift to a more regulated landscape promises both advantages and obstacles. The decentralized nature of US 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,” said Pinar Ozcan professor of Entrepreneurship and Innovation at Oxford University, in a statement.
“New regulations on personal financial data rights will make certain types of financial data available via the safer method of using Application Programming Interfaces (APIs). This will accelerate the transition in the U.S. Open Banking away from screen scraping,” said Figen Ceceli, SVP and head of Data Aggregation Product at Fidelity Investments, in a statement.