Open Banking's Promise of a Financial Revolution: Are We Falling Short?

Information is the main character in open banking (OB), which is about opening to third parties the access to information that is otherwise captive in a bilateral relationship between the incumbent provider of financial services and the client. With the words of Rivero and Vives in this issue, OB &q...

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Bibliographic Details
Published inEuropean economy (Roma) no. 1; pp. 9 - 20
Main Authors Navaretti, Giorgio Barba, Calzolari, Giacomo, Pozzolo, Alberto Franco
Format Journal Article
LanguageEnglish
Published Rome Europeye srl 01.01.2022
Subjects
Access to information
Bank services
Banking industry
Banks
Competition
Customer services
Financial services
Innovations
Privacy
Public good
Regulation of financial institutions
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United Kingdom > UK
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Summary:Information is the main character in open banking (OB), which is about opening to third parties the access to information that is otherwise captive in a bilateral relationship between the incumbent provider of financial services and the client. With the words of Rivero and Vives in this issue, OB "refers to those actions that allow third-party firms, either regulated banks or non-bank entities, to have access under customer consent to their data through application programming interfaces (API)". Specifically, open banking aims at creating a market for customers' transaction data, obtained (mostly although not only) from payment information. Traditionally, these data were accessible only by the financial intermediary performing the transaction and they were rather cumbersome to transfer. This gave banks the possibility to leverage on the data and extract higher rents from the interactions with their customers. OB allows customers to easily, swifly and freely transfer their own payment information to any authorized third party of their choice, thus changing the conditions for transactions with their financial intermediaries.
ISSN:2421-6917
2421-6917