Open Banking is taking off around the world.
Updated: Oct 9
By Frollo
Open Banking started in the UK in 2018 kicked off
by an EU regulatory directive called Payment
Services Directives (PDS2). PSD2 requires banks to
open up their data to third parties, whilst the UK’s
Open Banking Standard dictates that they do so in
a standard format in order to make it easier to use.
Following the UK’s lead, other countries – including
India, Japan, Singapore and South Korea – are
heading down a market-driven approach to Open
Banking with their policy makers introducing a
range of measures to promote and accelerate the
take-up of data sharing frameworks.
United States
The US have also opted for a market-led approach.
Whilst there aren’t any significant government
initiatives to support the development of Open
Banking products and services, there has been
some traction with major US banks developing
API-based offerings, in partnerships with third
parties, as a way to attract new customers and gain competitive advantage.
Alongside the EU, Hong Kong and Australia have
opted for a regulatory-driven approach.
The Hong Kong Monetary Authority issued an Open
API Framework in July 2018. While all banks will be
required to develop APIs, access to those APIs can
be restricted by the banks. They get to decide who
gets access.
Australia
In 2018, the Australian Government announced the
introduction of a Consumer Data Right (CDR) to
Australia’s banking sector. These changes will give
consumers control over their banking data and how
it is used with access to, and the ability to safely
transfer and share banking data with trusted parties.
The key difference between Australia’s Open Banking
approach and that in other markets is that the CDR is
a data policy initiative, not a financial services one. So
while CDR will apply to banks first, it will subsequently
apply to the energy and telecommunication sectors as
well, and could eventually apply to any sector. This will
make it easier for consumers to switch and get better
deals, and also opens up opportunities for even more
innovation across these sectors.
For example, a budgeting app can identify potential
savings on your energy costs or find you a cheaper
telco plan.
For the full Frollo report follow the link - https://frollo.com.au/open-banking/white-paper-cdr-game-changer/
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