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  • Frank Tian

Open Banking in the US

The market continues to develop while regulatory rulemaking is slow.


As reported by Reuters, the open banking rulemaking is held up due to privacy concerns.


CFPB is trying to strike a balance in the following:

  • How to scrutinize the influence of big tech in the marketplace,

  • How to protect the security, privacy, and effective consumer control,

  • How to best advance competition.


Consumers have expressed privacy and security concerns if their financial details fall into the hands of unknown entities or big techs.


Banks are not opposing open banking rules, but are reluctant to give out the data for free - they have spent significant resources to maintain and guard the data.


For open banking, Europe has taken a regulation-led route, while the US is adopting a market-led approach.


Nova Credit, which is known to provide foreign credit histories,

Rolled out a new open banking product named “Cash Atlas”.


This product is based on consumer’s bank account data and

Allows lenders to use cash-flow-underwriting to adjudicate new/thin files.


Stripe launches its own open banking connectivity.

Allowing its merchants to provide better payments and credit experiences.


Some wonder how much Stripe learned from the previous Plaid partnership.

Well, knowledge is gradually becoming open in the open era.


Sources:


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