open banking

On November 19, the Basel Committee on Banking Supervision (the “BCBS”) released a report on open banking and application programming interfaces (“APIs”), focusing specifically on aspects of open banking related to customer-permissioned data sharing, including sharing between a customer’s bank and various third party firms. The report builds on the BCBS’ February 2018 paper (“Sound Practices: Implications of fintech developments for banks and bank supervisors”), which noted the increasing adoption of advanced technologies—including APIs—by banks, service providers, and fintech firms to deliver innovative financial products and services. The key findings from the report are outlined below.

Continue Reading Basel Committee on Banking Supervision Releases Report on Open Banking

Another major bank recently announced the launch of an open application programming interface (or “API”) platform  through which it will grant third-party software developers access to its APIs for a number of use cases, including peer-to-peer payments, reward redemptions and account summary access.  The announcement comes on the heels of prepared remarks by Consumer Financial Protection Bureau (“CFPB”) Chairman Cordray at Money20/20, a large payments conference held in Las Vegas, suggesting that the CFPB views open APIs and other technology innovations that allow consumers to more easily access their own financial data to be a strategic priority.  Specifically, Chairman Cordray stated “We believe consumers should be able to access [their financial data] and give their permission for third-party companies to access this information as well” and noted that in the Dodd-Frank Act, Congress stated that consumer financial data “shall be made available in an electronic form usable by consumers”.

Continue Reading Open APIs: CFPB Comments and Legal Issues to Consider