Open
Banking
Framework
Open banking dismantles the traditional data moat of incumbent banks — mandating that customer financial data flow freely via standardised APIs, fundamentally altering competitive dynamics across the industry.
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What is Open Banking?
Open banking is a regulatory and technology framework that requires financial institutions to share customer financial data with authorised third parties via standardised APIs — with customer consent.
For decades, banks held an impenetrable data moat — customer transaction history, spending patterns, and financial behaviour were locked within proprietary systems. Open banking dismantles this advantage by making data portable and customer-controlled.
The result is a platform economy for financial services — where banks become infrastructure providers and fintechs build customer-facing experiences on top of their data and payment rails.
Over 60 countries now have open banking frameworks in place or under development. The UK leads with 12M+ active open banking users and 11B+ API calls annually.
Regulatory Landscape
Open banking mandates vary in scope and approach across jurisdictions — from prescriptive API standards to market-led frameworks.
Global Regulatory Comparison
2025| Region | Framework | Approach | Maturity |
|---|---|---|---|
| UK | Open Banking Standard | Prescriptive — CMA9 mandated | Most mature globally |
| EU | PSD2 / PSD3 | Regulatory — TPP access rights | Advanced |
| Australia | CDR | Consumer Data Right — broad scope | Growing rapidly |
| USA | CFPB Rule 1033 | Market-led with emerging mandate | Early stage |
| Singapore | MAS API Playbook | Voluntary industry-led | Developing |
API Ecosystem
The API layer is where open banking value is created — enabling a new class of financial products and services built on bank data and rails.
Market Impact
Open banking is redistributing revenue pools — creating winners and losers across the value chain.
Incumbents face fee compression as open banking enables direct account-to-account payments, reducing card interchange revenue. UK card payment volumes declined for the first time in 2024 as A2A payments gained share.
Fintechs gain distribution — access to bank data and payment rails dramatically lowers the cost and complexity of building competing financial products.
Banks risk becoming dumb pipes — providing the regulated infrastructure while fintechs capture the customer relationship and margin. The strategic response is to compete on data intelligence, not data exclusivity.
- → Payment revenue loss — A2A payments threatening $40–60B of annual card interchange revenue in mature open banking markets.
- → Data monetisation — Banks exploring consent-based data analytics products as a new revenue stream — offsetting fee compression.
- → Customer switching — Open banking lowers switching friction — increasing churn pressure on incumbents with legacy products.
- → Partnership models — Leading banks pivoting to marketplace models — distributing third-party products on their platforms.
- → Regulatory arbitrage — BaaS-enabled fintechs can operate with lighter regulatory burden — a structural advantage in some markets.
Open Finance Outlook
Open banking is evolving into open finance — extending data portability beyond payments into investments, insurance, mortgages, and pensions.
- → Open Finance — UK and EU expanding data portability to investments, pensions, and insurance — creating a unified financial data layer.
- → Real-time payments — Open banking payment initiation converging with domestic instant payment infrastructure — enabling true real-time commerce.
- → Smart data — AI + open banking data enabling hyper-personalised financial advice at scale — the next competitive battleground.
- → Global standards — ISO 20022 adoption driving international alignment in API standards — reducing cross-border friction for open banking services.
Banks that treat open banking purely as a compliance obligation will be disrupted. Those that treat it as a platform opportunity — building data-driven services and ecosystem partnerships — will emerge as structural winners.