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United States of America

Open Banking

Open Finance

The third largest country in the world is very much market-driven in its approach to finance.

Over 90% of Americans have access to the internet, with 99% of 18-29-year-olds using the internet (compared to 75% of 65-year-olds and over).

The American Treasury released a report in 2018, A Financial System That Creates Economic Opportunities – Nonbank Financials, Fintech, and Innovation (, which highlighted considerations for Open Banking. One such was that the General Data Protection Regulation (GDPR) of Europe and the UK does not apply to US citizens, but with more Open Banking across multiple jurisdictions, US entities wanting to attract consumers in these areas have to consider such safeguards in their product offerings. Despite no GDPR legislation, 84% of Americans agree that they should have control over their financial data, with over half worrying that Open Banking may not provide this safeguard. The Federal statute Dodd-Frank’s Section 1033 does give US consumers the right of access to their data but without current enforcement.  The Consumer Financial Protection Bureau (CFPB) is anticipated to promulgate a regulation implementing this section of law in the near future

In August 2021, the financial connectivity provider Plaid settled a $58 million lawsuit after accusations it had passed on personal financial data to third-party providers. Regulation could be helpful in increasing consumer confidence in sharing personal financial data.

In October 2023, the CFPB proposed a new Personal Financial Data Rights rule. 

This ruling is proposed in order to enforce the provisions of section 1033 within the Consumer Financial Protection Act of 2010 (CFPA). The proposed ruling aims to mandate that both depository and nondepository institutions provide consumers and authorized third parties with specific data pertaining to consumer transactions and accounts. It also outlines responsibilities for third parties that access consumer data, including essential privacy safeguards. Furthermore, it establishes fundamental criteria for data access and encourages the development of equitable, transparent, and all-encompassing industry standards.

The proposed ruling would ensure all banks allow consumers to share their data upon consent via API, bringing an incumbent-desired end to screen scraping. However, it is proposed that incumbent banks will not be permitted to charge aggregators for the use of these APIs.

The primary obligations of data providers are as follows:

  • Ensure the availability of all transactions from the previous 12 months, including the most recent card authorisations.
  • Include any information on fees, yield, or rewards that is accessible.
  • Provide essential account verification data, such as name, email, and address (excluding date of birth).
  • Establish secure APIs with transparent and standardised documentation.
  • Maintain a minimum uptime of 99.5% and refrain from unjustly limiting access.
  • Prohibit the imposition of fees for API access or API calls.

Key responsibilities for authorised third parties include:

  • Disclose to consumers how data is utilised and processed, as well as their privacy rights.
  • Utilise standardised APIs and security models, while keeping written policies in place.
  • Refrain from using data for targeted advertising, data resale, or cross-selling (except when consumers have implicitly opted in).

The CFPB has requested public comment by 29 December 2023 and if confirmed, expects to see implementation in a phased approach based on the value of assets under control.

FDX is developing interoperable API standards for Open Banking. With over 10,000 financial institutions serving consumers and small businesses, the development of a uniform Open Banking system involving bilateral data access agreements may be a practical impossibility.

According to FICO, 53 million people in the USA do not have enough data in their credit files to generate a credit score. A freeing up of data could allow for a more inclusive credit system based on other data points.

A 2021 survey by Axway indicated that just over 40% of United States citizens use one or more financial or budgeting apps beyond their own bank’s mobile app. In the same survey, almost 52% of those answering said they hadn’t heard of Open Banking and could not provide a definition.

Finastra research indicates that attitudes to Open Banking in the US had “matured” over 2022, with 68% of respondents viewing it as essential or important, up from 48% in 2021. Finastra’s ‘State of the Nation survey showed financial institutions in the US had a significant jump in thinking Open Banking was essential.

It is recognised that there is a racial gap in financial inclusion in the USA. The Federal Reserve reported in 2016 that a white family’s median family wealth was $171,000, compared to a black family’s at $17,600. If these families had access to the same financial products as white US citizens, McKinsey & Company thinks that approximately $2 billion in incremental, additional annual revenue could be raised by financial institutions. 

Thus in the USA, there have been considerable efforts to build access for underrepresented communities to banking services, as opposed to necessarily using Open Banking to improve credit possibilities. 10% of US citizens do not have a checking or savings account, known as being unbanked, according to a poll conducted during the summer of 2021, and a further 24% are ‘underbanked’, people who do have a checking or savings account but who have relied upon a service through something other than a credit union in the past year for such actions as paying a bill or cashing a check. The 10% of banked were more likely to be female, of lower income and of the younger Generation Z.

In 2019 a survey by the Federal Deposit Insurance Corporation indicated that 16% of unbanked households said they didn’t have an account because they “didn’t trust banks”. Initiatives, such as this by financial institution Wells Fargo are trying to improve access to banking and their digital services, Greenwood, which targets Black and Latino customers who are unrepresented in digital banking and MoCaFi, created to reduce the racial wealth gap, are examples of banking platforms trying to encourage the use of banking services. 

As of 2010, 11% of the adult population were classed as credit invisible, with an additional 8.3% of adults being unscorable by commercially-available credit scoring models, either due to a lack of recent history or a general lack of credit history. This lack of credit history is more concentrated amongst the young, as well as those with low incomes. While White and Asian applicants are equally likely to have no credit history of being unscorable, Black and Hispanics are more likely to have a limited credit history.  With traditional credit-scoring models, these potential customers will be denied credit.

Rural areas of the US, with their 33 million customers (as of 2019), are being underserved with bank closures creating ‘banking deserts‘. With urban bank branches being more profitable, there is a possibility for banks to invest in digital services to access remote customers.

The Consumer Financial Protection Bureau (CFPB), aware of the power Big Tech could yield with their collected data and market share, asked in October 2021 for details of the products, plans and practices when it came to payments of Google, Amazon, PayPal, Square, Facebook and Apple. The CFPB wants to prevent an undermining of market competition, as seen in China with WeChat Pay and AliPay, which dominate the market and will use their research to affect policy when it comes to the future of payments.

Platformable claims that as of Q4 2021, the US and Canada have 30 Open Banking platforms, 296 Open Banking API products and a growth rate of 76% compared to Q4 in 2020. For comparison, Europe and Scandinavia’s growth rate was 204% over the same period. Of these API products, 49% of them deal with accounts and payments.

As of October 2023, there are an estimated 80 million regularly active accounts using Open Banking services.

The USA ranked 26th out of 134 countries in Wiley’s Digital Skills Global Index 2021