In Europe, there is a different approach to data privacy than in any other geography. Data scandals such as Cambridge Analytica have triggered us to become more aware of our data, leading us to a destination where the user has complete control. We can now choose what data we share, who to share it with, and if we wish to monetise it. And these choices apply to the open banking arena.
with more than 51 countries deploying open banking, fintech ecosystems will have to define security and privacy in their own markets
Open banking is rapidly becoming a global movement, with more than fifty one countries deploying their own programmes and policies. The fintech ecosystems will have to define their own path for how they deal with security and privacy for different markets. The recent call from congress members for an FCC investigation into firms reselling data from legacy approaches, such as screen scraping, are surfacing risks. This highlights the gap between a user understanding how firms use their data against how the firms are monetising it.
Some European companies are also taking this approach – but typically not the supplier of the end user application. If you read the fine print, you may discover you’re signing over your data rights to a firm you’ve never heard of to use a fintech solution. This will risk breaking the trust in a new world of financial services – at a time where we as an industry need to be driving adoption of open banking. And in a digital-driven marketplace, where financial institutions need to fight for their market share, brand repetition is critical to remain competitive.
Trust is a fundamental building block of Open Banking. Open data sharing is designed to empower the end user – whether an individual or a business – to take control of their financial data, make more informed decisions and get better services from third parties across a range of financial products and providers.