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Empowering individuals with the ability to share their data can absolutely improve financial inclusion, especially fairer access to credit for vulnerable underserved communities. We talk a lot about thin-file or no-file credit history customers being brought into the fold by using transaction data to assess behavioural and affordability risk; we’ve seen considerable expansion in loan approval and credit worthiness for those who had previously been excluded once they were able to share their open banking data.

But what if one could share their employment data, or government benefits data, when assessing affordability? What if there were a bigger picture that shed a different light on whether or not a candidate were a default risk? Being able to share tax data or vulnerability characteristics can change a no to a yes for certain types of underserved or excluded groups. Open finance and open data are formalised frameworks that enable this type of safe, secure, and consent/permissioned intelligence exchange. Making a variety of alternative data mobile and sharible for those who don’t have a deep history of traditional financial data means a chance to actually GET more traditional financial products and services.

Open data can literally open up inclusion.

Ghela Boskovich

FDATA Region Director Europe

As we usher in the new year, members of FDATA North America are poised with great anticipation for the advancements in open banking and open finance, both regionally and globally. With significant strides made in the United States and Canada, there’s a collective optimism about shaping a more consumer-focused financial landscape.

In the United States, the attention is riveted on the Consumer Financial Protection Bureau’s proposed rule under Section 1033 of the Dodd-Frank Act. FDATA NA members view this as a pivotal shift towards a mandatory regulatory framework in open banking. The hope is that this change will catalyze a financial ecosystem that champions innovation, competitiveness, and inclusivity, breaking free from the traditional dominance of large institutions. The expectation is a financial marketplace that is not only dynamic but also more attuned to the needs and rights of consumers.

The recent developments in Canada, particularly the anticipated enactment of the Fall Economic Statement Implementation Act, 2023, also resonate positively with FDATA NA members. This move is seen as a foundational step towards a structured, mandatory open finance regime. Members anticipate that these measures will significantly advance Canada’s open banking framework, fostering an environment ripe for innovative financial solutions tailored to consumer needs.

Overall, FDATA NA members are hopeful that these regulatory evolutions in the U.S. and Canada will lead to a broader global transition towards secure, efficient, and consumer-driven open banking and finance systems. As we step into this new year, there’s an air of expectancy for transformative changes that could redefine the interaction between consumers and financial services on a global scale.