Moving Markets Towards Open Finance
The first five years of open finance have revealed two key lessons for emerging markets seeking to develop open finance ecosystems:
- Voluntary data-sharing models are less likely to provide robust competition and inclusion benefits.
- Government data can help unlock financial innovation and incentivize provider participation.
Globally the most successful open finance models to date are also the ones where there has been some element of mandatory opening for financial service providers. Unfortunately, a review of open banking and open finance models in EMDEs shows that some markets are continuing to design voluntary models, although there appears to be a shift in thinking globally towards mandatory data-sharing rules for at least part of the financial sector. This paper summarizes open finance policy approaches globally, as well as the ways that government-controlled financial data can help catalyze open finance where industry is hesitant to lead.
