In Europe, banks are moving beyond open banking and PSD2 requirements, steadily transitioning towards open finance. Banks in Continental Europe are slowly expanding the data set made available through open APIs, moving steadily towards open finance. Banks in France, Denmark and the Netherlands were found to be amongst those ahead of the curve, providing access to information about credit card transaction information, mortgage, savings, and investment accounts. Open finance is the next step in the open banking journey that involves enabling third-party providers to access customers’ data across a broader range of financial sectors and products, including savings and investments. Legislations like Australia’s Consumer Data Right are setting the foundation for the sharing of data not only across the banking industry but other sectors as well including insurance, investment, energy, and telecommunications.
In Europe, an open finance framework is currently in the works with hopes for greater data-driven innovation in the financial sector. Building on the progress made with the landmark revision of the Payment Services Directive (PSD2), the new legislation will seek to further enhance data sharing and openness across and within sectors. A legislative proposal for the framework is expected by mid-2022. The open finance framework is part of the European Commission (EC)’s broader Digital Finance Strategy, which sets out key priorities for the development of digital finance. These priorities include removing fragmentation in the Digital Single Market by reducing regulatory coherence and facilitating cross-border activities, adapting the European Union (EU) regulatory framework to encourage digital innovation notably in the areas of artificial intelligence (AI) and crypto-assets/blockchain technology, promoting data-driven innovation in the broader finance sector, and addressing the challenges and risks associated with digital transformation.