Open Banking is already making major headway within the EU; the third Payment Services Directive (PSD3) and the Payment Services Regulation (PSR) are set to play crucial roles in shaping both the speed and direction of the EU payments sector.
With this, all eyes turn to the US and the growing role new government-backed, financial directives are playing on the future of US Open Banking.
Historically, the United States has embraced a market-driven approach to Open Banking, allowing third-party providers to create innovative applications and offer services tailored to customers’ unique financial needs. However, with the advent of Open Banking and the increasing requirement for more transparent financial data sharing, the US is transitioning towards a regulator-driven model. This shift aims to support a decentralized and neutral consumer financial market structure. As a result, the US and Europe are now aligning more closely in terms of banking regulations, with both regions backing government-supported frameworks.
This white paper examines the evolution of Open Banking in both the US and Europe and explores the anticipated impacts of these new regulatory proposals on banks and their customers.
“Looking at how fintechs are evolving in the US, access to reliable banking data to support the growth of new use cases is crucial. The US is currently undergoing a significant transformation that will shape how data is shared between banks and fintechs. The Consumer Financial Protection Bureau has issued a ruling enforcing Section 1033 of the Dodd-Frank Act, mandating financial institutions to provide access to their financial data via APIs. This move is a step towards eliminating screen scraping and promotes competition, transparency, and consumer empowerment. We will see substantial improvements in customer experience, financial inclusion, and market efficiency. Section 1033 is poised to modernize the U.S. banking sector, fostering a more dynamic, inclusive, and consumer-friendly financial environment.”
Nicolas de Genot de Nieukerken, Head of Product, Open Banking at SBS
At SBS, we are continuously working with experts & industry leaders in the US market, as Open Banking further evolves in the US, while also supporting our customers through our EU experience.
SBS is positioned as a crucial partner for banks navigating the intricate landscape of Open Banking regulations from 2024 to 2025. We ensure compliance, foster customer trust, drive sectoral innovation and growth, and pave the way for your Open Finance strategy to meet market demands.
To find out more about our solutions and schedule a call with one of our experts, click here.