2023年はオープンファイナンスを語る上で重要な年となるだろう

It seems scarcely possible that we’re into February already (where did January go?), but one thing is clear: 2023 is going to be a pivotal year in the development of open finance. As predictions go, this isn’t particularly brave though. Last year saw the launch and further enhancement of open finance and open data initiatives across all regions, reinforcing the fact that this is a truly global development.

It is also one that is now squarely rooted in the concept of customer data ownership. While the initial impetus for open banking was largely about stimulating competition, the regulatory focus has shifted over time and empowering customers to decide how their data is used is most commonly the driving force. While this may seem like a small distinction, it demonstrates that the direction of travel will continue to be towards greater openness, rather than less.

In other words, the genie is not going back in the bottle. Banks need to ensure that they are fully aware of the opportunities and challenges presented by open finance, and that they have given this due consideration in their short and medium-range technology and product development roadmaps.

So what makes 2023 so important?

There are some significant regulatory interventions due in 2023, each of which will further develop the open finance ecosystem. One of the most eagerly anticipated will come from the Consumer Financial Protection Bureau (CFPB) in the US, which announced in October 2022 its intention to create a regulatory framework for customer financial data sharing. It is expected to publish its response to the initial consultation in the first half of this year, with a proposed set of rules due to follow. The US already has one of the world’s most advanced data sharing and fintech ecosystems already, but the potential for a regulatory framework to bring greater standardisation and reach is likely to catalyse further change and innovation in the landscape.

It also looks likely that the current open banking framework in Europe will be expanded to cover a broader array of financial products. As part of the EU digital finance strategy, the European Commission ran a consultation on a proposal for an open finance framework in mid-2022. The response to this is expected imminently. In parallel, a review of PSD2 is also underway, which may also lead to changes to the existing regulatory framework. Indeed, it’s possible that this process leads to either PSD2 being revised in part or updated entirely with a third payment services directive (or PSD3). In addition, it seems likely that the creation of a European digital identity framework will support the move towards greater financial data sharing.

Changes are also likely in the UK. With the original open banking roadmap now judged to be complete, the joint regulatory oversight committee (JROC) is currently shaping proposals for the strategic roadmap and long-term regulatory framework. One important consideration will be the alignment with related initiatives such as the forthcoming new payments architecture (the project to upgrade domestic account-to-account infrastructure), the creation of the Pensions Dashboard, and various government initiatives around Smart Data.

What does this mean for the industry?

Given the momentum behind these initiatives, banks should keep two thoughts in mind.

The first is to ensure that the technical architecture supporting open finance has the agility and flexibility to respond to future changes. This is an ecosystem that will continue to develop over time, as regulatory requirements evolve, and new commercial opportunities emerge. While it may be tempting to take a ‘once and done’ approach to regulatory mandates around open finance, the pace of change in this space creates a strong likelihood of experiencing buyer’s remorse.

The second point is to ensure that your product roadmaps and development plans are alive to the opportunities for innovation and process improvement. The list of use cases is growing, and there are already many examples of banks actively benefitting in areas including customer onboarding, risk and credit scoring, payment services, and new value-adding services for SME customers.

There will be winners and losers in this space, and the investments made in the coming 24 months will be influential in shaping the future competitive landscape. Those banks that are proactive in unlocking the benefits of open finance will put themselves in the best position for future growth.