Open Banking is taking off around the world.

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/