Open Banking is set to launch in Europe next month. As banks and fintech firms rush to ensure compliance we wanted to explore the effects on the US fintech market. Recently the CFPB set forth data sharing guidelines for banks and fintech firms to share information. There has since been a number of articles in the news pointing to frustration among fintech companies as banks have not been forthcoming with data sharing.
In October 2015 the European Parliament adopted the PSD2 proposal to create safer and more innovative European payments. The new rules were meant to promote the development and use of innovative online and mobile payments through open banking, and make cross-border European payment services safer.
The new directive has helped to usher in a segment of fintech startups that have begun eating into the market share of banks. App only banking apps like Revolut, Monzo and Starling Bank have all had significant levels of success in reinventing the banking experience. Part of the reason these firms have gained momentum so quickly is the anticipated open banking directive.