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Cybersecurity & Standards, Privacy & Data

Open Banking: Building Trust

CDT report, entitled "Open Banking: Building Trust.""
CDT report, entitled “Open Banking: Building Trust.”


The United States is the global leader in online innovation and in the development of online services and applications. But the U.S. significantly lags behind the European Union in the development and offering of open banking apps and services, reflecting the yet-to-be-realized promise of innovation in “fintech.” Open banking services are products that securely connect with traditional banks to be able to offer innovative services to banking customers. Open banking offers significant potential benefits to consumers through competition, innovation, and increased convenience.

But to achieve those benefits for consumers, open banking must overcome significant hurdles in terms of trust, and most critically in terms of the privacy and security of customers’ banking data. Like health information, financial information is very sensitive and users will need significant protections of their data for open banking products to be broadly embraced in the U.S. Americans are already hesitant to fully embrace the online world because of privacy concerns, and they will be all the more cautious with financial apps and services.

This paper looks at the history and progress of open banking and identifies steps that policymakers and industry can take to ensure that the U.S. can catch up with Europe in terms of vibrant – but security- and privacy-respecting – open banking apps.

Read the full report here.