U.S. Open Banking Poised for Major Acceleration, but Political Uncertainty Could Hamper Momentum

Open Banking in the U.S. has reached a market inflection point following recent major new financial regulation, but the future direction of policy is unclear with Donald Trump’s victory as the next U.S. president.

The Transatlantic Index USA, a report released by Open Banking Excellence (OBE) is an in-depth, data-driven exploration of the evolving U.S. financial landscape as the world’s largest market accelerates into Open Banking. Featuring insight from Open Banking experts around the world, the report is built on both qualitative and quantitative research including expert interviews conducted by Oxford University. 

The Consumer Financial Protection Bureau’s (CFPB) Personal Financial Data Rights Rule, brought in under Section 1033 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, enshrines consumers with the right of access to their digital financial data and the ability to share it securely with third parties.

Biden-Harris’ policy focus around banking ‘junk fees’ crackdown, however, was key to the support behind Section 1033. The future direction of Open banking regulations in the U.S. is brought into question following the change of administration, particularly given Trump’s explicit rhetoric on looser regulation and tariffs.

According to a global survey, that predates the election result, of Open Banking executives, 90% of companies were considering U.S. expansion following the finalisation of the new regulations.

Open Banking in the U.S. goes back 25 years and has an estimated c.100 million users, but has largely been conducted via ‘screen scraping’. The use of safer and more reliable Application Programming Interfaces (APIs) is now rapidly underway thanks in part to the CFPB’s new rules.

Helen Child, Founder and CEO of Open Banking Excellence (OBE) commented: “The Transatlantic Index clearly shows a gigantic market opportunity. When the UK’s expertise in Open Banking, having created the blueprint, is combined with the super-sized U.S. market scale, the effect is transformative.  It marks the positive shift of the inflection point that the industry has been working towards.”

“For those in the fintech, Open Banking and wider financial services community, all eyes will now be keenly focused on the likely future direction of policy in the U.S. following Donald Trump’s victory”. 

“After the success of the Global Open Finance Index, now regarded as an industry benchmarking report,  OBE was asked by Regulators and CEO’s around the world to produce the Transatlantic Index.  To show the impact of the U.S. market launching Open Banking and the market opportunity this creates. Our Index is designed to support accessing this massive market, with diverse insights from industry leaders, regulators and academics with a fascinating section on culture. Our must read ‘What Every CEO Needs to Know’ chapter, does what it says on the tin,” commented Helen Child. 

“Open Banking in the United States stands at a critical juncture. Despite substantial market-driven advancements, the impending shift to a more regulated landscape promises both advantages and obstacles. The decentralised nature of U.S. financial regulation, with its intricate interplay of state and federal laws, coupled with a fragmented market structure composed of numerous smaller banks and credit unions, can complicate efforts to establish a cohesive and uniform Open Banking environment,” said Pinar Ozcan is Professor of Entrepreneurship and Innovation at Oxford University.

“New regulations on personal financial data rights will make certain types of financial data available via the safer method of using Application Programming Interfaces (APIs). This will accelerate the transition in the U.S. Open Banking away from screen scraping,” said Figen Ceceli, SVP, Head of Data Aggregation Product, Fidelity Investments.