Gaining a Competitive Advantage with Open Banking

According to new MX research, 55% of U.S. consumers agreed they would give their financial provider access to more of their data if they knew it would result in a better experience. This is a significant jump from May 2024 — when 46% agreed with the same statement. 

Open Banking is a driving force behind this data-driven personalization and is key to success for financial institutions. It enables consumers to seamlessly connect their financial accounts into one view, providing them with a comprehensive look at their finances and arming financial providers with greater insights to deliver the right solutions, tools, and insights to meet their financial needs.

In 2025, we predict Open Banking adoption will speed up as those who lead from the front seek to gain the competitive advantage.

MX sees 5 key trends shaping success for financial providers in 2025, from AI to fraud to app consolidation to Open Banking. Learn more about our top predictions in our whitepaper or watch the webinar with expert insights.

New Open Banking Regulations

Today, there is no open banking conversation without first touching on regulations. It was a big year for new industry-wide regulations on consumer data sharing rights in 2024. Both the Section 1033 ruling of the Dodd-Frank Act from the Consumer Financial Protection Bureau (CFPB) and Canada's 2024 Fall Economic Statement have unveiled consumer-driven banking frameworks across North America. These new regulations solidified key aspects of Open Banking:

• Consumers own their data and should have control over how it is accessed and shared
• Privacy should be an integral part of data sharing
• Financial institutions should have to continue to compete for their consumers’ deposits by offering the best service possible

Open Banking as a Competitive Differentiator

Even though Open Banking is not new, many financial institutions are not harnessing its full power. With new regulations top of mind, Open Banking will continue to speed up. Those that fully invest in Open Banking will lead from the front.

A good open banking strategy will help businesses better mold their products and services to meet the needs of consumers and create personalized offers. Financial providers who start now will be able to better deliver on consumer expectations and stand out from the competition.

With compliance deadlines still over a year away and a new presidential administration taking shape in the United States, some institutions may opt to wait to take action. But waiting to see how things play out will stop businesses from capitalizing on the opportunity that Open Banking presents. 

Businesses who fail to adopt Open Banking will be at a vulnerable place and will find it more difficult to catch up with those that were early adopters. In today’s age of competition, financial institutions that are proactive in their open banking approach will be better positioned to win in 2025.