While open banking is already a reality in the U.K. and much of Europe, in other parts of the world including the U.S., it is still an emerging trend. Articles touting the benefits of open banking and the underlying need to embrace APIs are widespread, so U.S. financial institutions are feeling the pressure to enable open banking.
But why would any institution want to explore open banking voluntarily, rather than by government requirement — as it was in the U.K.? It’s a reasonable question.
As new technologies continue to advance digital capabilities of today’s banking providers, consumers increasingly expect that the third-party apps they use such as those for budgeting can easily access to their account data. Additionally, bigtech companies like Google, Amazon, Facebook and Apple are innovating rapidly, with their eyes set on breaking into the financial services, thereby increasing the pressure felt by U.S. institutions.