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2023 Roundup: Top 20 Milestones in Open Banking

Table of Contents

Unmasking Open Banking's Game Changers in 2023

2023 has been a pivotal year in the world of open banking, marked by significant partnerships, technological advancements, and regulatory milestones. Here’s a look at the Top 20 events that shaped the open banking landscape last year.

Infographic timeline showcasing the top 20 events in open banking from 2023, with the logos of the players involved and brief description of the milestones.

1. Apple Launches ‘Connected Cards’ Using Open Banking in the UK

Event Overview

Apple introduced ‘Connected Cards’ in the UK, integrating open banking to streamline financial management and transactions on Apple devices. The Wallet app will now display account balances (including credit cards) and transaction history for UK users, supporting major banks, including Barclays. 

Potential Impact

This integration is expected to significantly enhance the user experience by providing users with the ability to access balances and transactions for multiple cards and accounts seamlessly through Wallet, improving financial visibility and budgeting control. Apple’s involvement could normalise open banking, encouraging wider adoption and innovation in the financial ecosystem. Payment initiation directly from bank accounts could be the next frontier for Apple to expand into. 

Beneficiaries

Primarily benefiting consumers by offering them a more integrated and intuitive financial management experience, it also aids financial institutions by potentially increasing engagement and transaction volumes through Apple devices.

2. J.P. Morgan and Mastercard Take Pay-by-Bank Live

Event Overview

J.P. Morgan and Mastercard partnered to launch Pay-by-Bank, enabling direct bill payments from bank accounts.

Potential Impact

This service is expected to streamline bill payments, offering a more direct and efficient method of transaction, and potentially reducing processing fees and settlement times for merchants.

Beneficiaries

Both consumers and billers benefit – consumers enjoy simplified payments, while billers potentially see faster payments and reduced processing costs.

3. CFPB Proposes Rule to Accelerate Shift to Open Banking

Event Overview

The Consumer Financial Protection Bureau (CFPB) proposed a rule aimed at fostering competition and expediting the transition to open banking in the US.

Potential Impact

This could lead to much-needed clarity on the roles and responsibilities of banks, data aggregators, and fintechs. It can help accelerate even more innovative financial products and services, improving transparency and consumer choice in the financial sector.

Beneficiaries

The proposal benefits consumers through increased financial product options and potentially better pricing, while new and existing fintech companies may benefit from a more level playing field.

4. Plaid Establishes New Entity for Credit Risk Insights

Event Overview

Plaid set up a new division to develop solutions for customers seeking credit risk insights from consumer-permissioned cash flow data.

Potential Impact

This move could revolutionise credit risk assessment by leveraging real-time financial data, leading to more accurate and inclusive credit scoring.

Beneficiaries

This benefits lenders with improved risk assessment tools and consumers, particularly those with limited credit history, by potentially offering more access to credit.

5. Stripe Chooses TrueLayer for European Open Banking Payment Option

Event Overview

Stripe selected TrueLayer as its partner to introduce its first open banking payment option in Europe.

Potential Impact

This partnership is expected to offer more efficient and secure payment options, reducing reliance on traditional card payments.

Beneficiaries

E-commerce businesses and consumers stand to gain through more secure and potentially lower-cost transaction options.

6. Volt Becomes an Approved Shopify Open Banking Payments Partner

Event Overview

Volt joined forces with Shopify, integrating its real-time payments gateway as an open banking solution for e-commerce.

Potential Impact

The approval of Volt as a Shopify partner paves the way for merchants in the UK, Europe, Brazil, and soon Australia to integrate Volt’s ‘Pay by Bank’ solution at checkout. This will enable customers to initiate instant, real-time account-to-account payments, enhancing the checkout experience with faster and more secure payment options. As Volt’s solution expands to other countries, this partnership is set to revolutionise the payment process for a growing global network of Shopify merchants.

Beneficiaries

Shopify merchants and online shoppers benefit from more efficient and secure payment methods.

7. Canada Government's Open Banking Framework Announcement

Event Overview

The Canadian government announced plans to introduce a consumer-driven banking framework(another name for open banking) in the 2024 federal budget.

Potential Impact

The Canadian government’s initiative is set to have a transformative impact on Canada’s financial landscape, especially given the concentration of major banks. This move towards open banking promises to stimulate competition, empowering consumers with greater control over their financial data. It’s expected to drive innovation within both established banks and emerging fintech firms, leading to the development of more personalised financial products and services. Furthermore, this shift has the potential to enhance financial inclusivity and contribute to broader economic growth by fostering a dynamic, competitive, and customer-centric financial services sector in Canada.

Beneficiaries

Consumers and fintech companies benefit from a more competitive landscape with potentially better financial products and services.

8. Brazil Rolls Out Phase 2 of Open Insurance

Event Overview

Brazil progressed in its open banking journey by implementing phase 2 of its Open Insurance initiative.

Potential Impact

The start of Phase II of Open Insurance, focusing on the sharing of personal data, is expected to greatly enhance the customisation and personalisation of insurance products and services. This phase will give consumers more control over their data, leading to better-tailored insurance plans, more competitive pricing, and potentially a more efficient and user-friendly insurance market experience. As personal data becomes more accessible within a secure framework, it could also spur innovation in insurance products and customer service.

Beneficiaries

Consumers seeking insurance and insurance providers benefit from a more dynamic and competitive market.

9. Saudi Central Bank Debuts Open Banking Lab

Event Overview

The Saudi Central Bank launched an open banking lab to stimulate innovation in the sector.

Potential Impact

The launch of an open banking lab by the Saudi Central Bank is poised to significantly stimulate innovation in the financial sector. This initiative is expected to foster a collaborative environment where fintech startups and traditional financial institutions can develop and test new digital banking solutions. This could lead to more personalised banking services, enhanced financial inclusivity, and a boost in the overall technological advancement of Saudi Arabia’s banking industry.

Beneficiaries

Fintech startups and financial institutions in Saudi Arabia benefit, along with consumers who may see more innovative financial solutions.

10. AmEx Forms Data Sharing Agreements with Plaid and Yodlee

Event Overview

American Express entered into data-sharing agreements with Plaid and Yodlee to facilitate connectivity with third-party financial apps.

Potential Impact

The data-sharing agreements between American Express, Plaid, and Yodlee are set to enhance digital financial services significantly. By facilitating connectivity with third-party financial apps, these agreements will provide American Express cardholders with more comprehensive financial management tools. This collaboration is likely to lead to improved user experience, greater financial transparency, and potentially more personalised financial services, reflecting a more integrated and customer-centric approach in the financial sector.

Beneficiaries

AmEx cardholders benefit from increased financial management capabilities, while third-party apps gain more comprehensive data access.

11. Adyen Teams with Plaid for Pay-by-Bank in North America

Event Overview

Adyen collaborated with Plaid to launch Pay-by-Bank in North America, enabling direct account-to-account transactions.

Potential Impact

This is likely to offer a more streamlined and cost-effective payment method, reducing reliance on traditional card networks and improving transaction speed.

Beneficiaries

E-commerce businesses and consumers in North America are set to benefit from more efficient and possibly lower-cost payment options.

12. Alipay+ Partners with Yapily

Event Overview

Alipay+ and Yapily partnered to explore the application of open banking on mobile payment platforms, aiming to enhance global consumer-merchant connectivity.

Potential Impact

The collaboration between Yapily and Alipay+, enabled by Yapily’s open banking infrastructure, is poised to revolutionise cross-border payments. European consumers will be able to seamlessly make payments to Alipay+ merchants worldwide directly from their bank accounts. This integration promises a smoother payment experience with enhanced security. The move to account-based payments is expected to streamline Alipay+’s payment processes significantly, making them more efficient and trustworthy for all parties involved. 

Beneficiaries

The primary beneficiaries of this partnership are both merchants and consumers. Merchants using Alipay+ will benefit from Yapily’s scalable and resilient open banking payment structure, which is expected to deliver service excellence and business agility. Conversely, consumers will enjoy a more streamlined and secure payment process, making international transactions more convenient and trustworthy. They also stand to gain from the enriched retail experience that comes with integrated promotions and additional services, leading to a more engaging and rewarding shopping journey.

13. TD Bank Group and Plaid Enter Data-Access Agreement

Event Overview

TD Bank Group and Plaid entered into a data-access agreement in North America, focusing on customer data sharing and accessibility.

Potential Impact

This agreement is expected to facilitate secure and more seamless sharing of financial data, enhancing digital banking and fintech services.

Beneficiaries

The primary beneficiaries of this partnership are TD Bank’s customers. They stand to benefit from an enhanced digital banking experience characterised by increased security, privacy, and convenience. Customers will be able to access various applications and services on Plaid’s network more securely and efficiently, without the need to share sensitive login information. 

14. Belvo and FICO Team Up in Latin America

Event Overview

Belvo and FICO partnered to expand access to credit in Latin America by leveraging open banking platforms.

Potential Impact

This collaboration aims to revolutionise credit assessment in the region, leading to more inclusive credit scoring and lending practices. By utilising consumer-permissioned transaction-level data from various financial accounts, it will generate a credit risk score that is more inclusive and accurate than traditional methods. This can potentially democratise credit access for a broader spectrum of consumers while improving risk management for banks. Moreover, the partnership will enable lenders to offer personalised financial experiences, enhancing customer satisfaction and loyalty. The interpretable and explainable nature of the machine learning model ensures transparency in credit assessments.

Beneficiaries

The primary beneficiaries of this partnership are consumers, especially those who may have been previously underserved or excluded from traditional credit assessments. The Belvo Open Finance Score is expected to open doors to credit access for a more diverse range of consumers, helping them achieve their financial goals and aspirations. Financial institutions and banks also stand to gain from this collaboration, as it will enhance their risk management capabilities and enable more informed lending decisions.

15. Tink Embeds Ecolytiq’s Sustainability Solution

Event Overview

Tink integrated Ecolytiq’s sustainability solution into its platform, aiming to scale sustainability services across Europe.

Potential Impact

With this collaboration, financial institutions will gain a powerful tool to assist customers in understanding the environmental impact of their consumption habits across all their bank accounts and transactions. This integration promises to provide customers with a comprehensive coaching experience that focuses not only on spending but also on its connection to sustainability. As a result, individuals can make more informed choices and reduce their environmental footprints. Additionally, this partnership is expected to accelerate the adoption of open banking-driven services among financial institutions, further expanding the availability of financial coaching and sustainability-related money management tools.

Beneficiaries

The primary beneficiaries of this partnership are customers and financial institutions across Europe. Customers who are already integrated with Tink will enjoy a seamless addition of sustainability-focused coaching to their financial services. They will have access to tools that empower them to make more sustainable financial decisions and align their consumption habits with their environmental values. For financial institutions, this collaboration enables them to enhance their offering by providing valuable sustainability-related services to their customers.

16. TransUnion Announces Investment in Bud

Event Overview

TransUnion invested in Bud, a technology platform, to drive innovation and growth in open banking.

Potential Impact

TransUnion’s strategic investment in Bud promises to advance innovation in personal finance and automated income verification. This will streamline income verification processes for finance providers, benefitting applicants with limited credit history or prior credit challenges. This partnership combines TransUnion’s global expertise with Bud’s Open Banking platform to develop cutting-edge credit, affordability, and fraud solutions. These innovations will enhance customer onboarding, personal financial management services, and engagement, benefiting both financial institutions and consumers.

Beneficiaries

Financial institutions will benefit from more efficient income verification, leading to better lending decisions and fraud prevention. Consumers will enjoy a smoother customer experience and access to previously challenging financial products and services. Ultimately, the collaboration aims to drive financial inclusion, improve credit assessments, and enhance consumers’ path to financial well-being.

17. Brankas and Arab Financial Services Collaboration

Event Overview

Brankas and Arab Financial Services collaborated to strengthen the open finance infrastructure in the MENA region.

Potential Impact

This collaboration aims to enhance digital payment systems and broaden financial inclusivity, facilitating more efficient and secure financial transactions in the MENA region. By creating direct bank integrations, this collaboration will simplify critical financial processes such as credit scoring, payroll disbursements, account-to-account payments, and new bank account openings. These integrations will enable tech platforms to offer essential financial services, fostering financial inclusion and making it easier for individuals and businesses in countries like Bahrain, the UAE, Saudi Arabia, and Egypt to access financial solutions. The move to integrate with banks’ infrastructure represents a step toward expanding and innovating the financial ecosystem, empowering clients to provide customer-centric products and positively impact the lives of their customers.

Beneficiaries

The primary beneficiaries of this partnership are financial institutions and individuals in the MENA region. Financial institutions gain from streamlined processes and enhanced financial services, enabling them to better serve their customers. For individuals and businesses in MENA countries, this collaboration opens up opportunities for easier access to credit, more efficient payroll services, smoother account-to-account payments, and simplified bank account openings. 

18. Ayoconnect Partners with Mastercard

Event Overview

Ayoconnect partnered with Mastercard to develop innovative solutions in bank-account-based payments and open finance.

Potential Impact

The partnership holds the potential to accelerate bank account-based payments and open finance solutions in Indonesia. The collaborative effort aims to provide consumers with a seamless, secure, and convenient payment experience at merchant checkouts directly debited from their preferred bank accounts. This innovation not only simplifies the payment process but also enables consumers to efficiently manage their bill payments, ensuring timely settlements for billers. Furthermore, the new solution offers enhanced customer protection and dispute resolution capabilities, differentiating it from typical account-to-account payments. It also addresses recurring payment obstacles, reduces drop-offs during checkout, and ensures timely collections for billers. Overall, this partnership is expected to enhance the financial ecosystem in Indonesia by introducing modernised and efficient payment solutions.

Beneficiaries

The primary beneficiaries of this partnership are consumers, billers, and the broader financial industry in Indonesia. Consumers will benefit from a more straightforward and secure payment experience, as well as improved bill payment management. On the other hand, billers will enjoy guaranteed timely payments, reduced drop-offs during checkout, and an overall frictionless experience for their customers. 

19. Xero Partners with Flinks

Event Overview

Xero teamed up with Flinks to connect more small businesses in Canada and the US to their banking data.

Potential Impact

The collaboration between Xero and Flinks is poised to significantly impact small businesses in Canada and the US. By granting Xero customers secure access to more than 20 direct bank connections and high-quality transaction data, this collaboration significantly enhances the accuracy and efficiency of banking transactions. Small businesses and advisors will benefit from streamlined access to North American financial institutions, saving valuable time previously spent on manual data entry and reconciliation. This partnership offers a tangible solution to a common challenge, reducing room for error and improving the overall financial health of small businesses.

Beneficiaries

The primary beneficiaries of this partnership are small businesses, bookkeepers, and accountants in Canada and the United States. Small business owners will gain secure access to direct bank feeds, enabling them to manage their finances more accurately and efficiently. By automating data entry and reconciliation processes, this collaboration empowers small businesses to allocate more time and resources to their core operations. Bookkeepers and accountants, who play a crucial role in supporting these businesses, will also benefit from reduced manual data entry tasks, allowing them to provide more valuable insights and services.

20. Salt Edge and SeaPay Join Forces

Event Overview

Salt Edge and SeaPay partnered to empower Saudi Arabian merchants with open banking solutions.

Potential Impact

This collaboration aims to empower local merchants by providing them with innovative open banking solutions, aligning with the vision of the Saudi Central Bank to foster a thriving business environment. By granting merchants access to financial data from numerous banks across the Middle East and globally through a single API, this partnership streamlines the payment process and eliminates the need for individual connections with multiple banks. This innovation enhances the efficiency of financial transactions for merchants, enabling them to focus on their core business activities. Additionally, SeaPay customers will benefit from a secure, instant, and cost-effective payment method, further driving the adoption of open banking in Saudi Arabia.

Beneficiaries

The primary beneficiaries of this partnership are local merchants in Saudi Arabia. Local merchants gain access to cutting-edge open banking solutions that simplify their payment processes and enhance efficiency. This empowers them to conduct business operations more smoothly and effectively. Merchants would also enjoy the advantages of a secure, instant, and cost-effective payment method, aligning with the evolving regulatory framework for payment origination under open banking. 

Charting the Open Banking Path Forward

2023 has been a pivotal year for open banking, marked by significant developments that are reshaping the financial landscape globally. From Apple’s innovative ‘Connected Cards’ to the expansion of open banking in regions like Saudi Arabia and Brazil, each event has contributed to the growing influence of open banking in our daily lives.

In this dynamic landscape, embracing the possibilities of open banking while addressing its evolving complexities will be the way forward. As we move into the new year, collaboration, innovation, and a commitment to improving financial services for all will remain at the forefront of the open banking journey.

Authors

Founder & CEO | sanjeev@whitesight.net

Sanjeev is a fintech aficionado who loves to explore the depths of the industry as much as he loves to explore the depths of the ocean in his scuba gear. He is the founder and CEO at WhiteSight, bringing a wealth of research and advisory experience to the fintech world.

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