Pettet : Open banking has primarily been industrydriven in the US vs . regulatory-driven as seen in other countries . It will continue to progress in the US but on a macro level at a cautious pace .

However , the Consumer Financial Protection Bureau recently announced its Personal Financial Data Rights rule as the basis for establishing compliance standards and the framework for a more open ecosystem . They expect to finalise this rule in 2024 and quickly follow with implementation in an effort to accelerate progress .

In the meantime , the larger banks will lead as the basis for their digital transformation efforts and , in doing so , create new business models and value propositions , while smaller banks will take more targeted or even wait-and-see approaches .

Regardless , most banks will focus digital investment in preparing for open banking through developing open application programming interfaces ( APIs ) to enable secure data exchange between institutions , beginning to identify value propositions and customer segments to target and progressing thinking around privacy and security processes to protect customer data .

Ultimately , banks are viewed favourably by their customers who believe they will safeguard their money and data . As a result , they are well positioned to expand their offerings beyond traditional banking services as open banking progresses in the US .

KEVIN PETTET CHIEF OPERATING OFFICER

OF BANKING SOLUTIONS , BOTTOMLINE

Patel : I think 2024 may well be the year that open banking becomes a mainstay in the global financial landscape . As a technology , open banking enables a bank to safely share financial information with third-party financial institutions , through so-called open banking APIs .

Third parties like expense tracking companies , money lending firms and others use this data to develop wider product offerings . Ultimately , what this data exchange allows modern financial services providers to do is offer personalised and client-focused services .

And like last year , 2024 will be another year where client-centric product and service development are paramount . My view is open banking will come to underpin much of the financial services sector ’ s future development , especially in terms of ecosystems and connected finance .

And it is imperative , for any financial institution that wants to excel – let alone stay competitive – that they incorporate it from the ground up .

52 January 2024