Both countries share strong consumer adoption potential and innovation environments. But while UK consumers still have doubts about security and data protection, customers in mainland China are more comfortable opening up their banking data in exchange for better services.
Regulatory environment – push or pull?
Index results demonstrate that there is no single regulatory recipe for open banking success.
In the EU, the Revised Payment Services Directive (PSD2) mandates banks to share data with third-party providers (TPPs), once consumers consent. UK and German regulators have been the most proactive, with both involved in determining standards for the application programming interfaces (APIs) that will connect banks and TPPs. The UK’s Open Banking Implementation Entity (OBIE) is also closely overseeing the development of the market’s open banking ecosystem.
Other countries favor a market-driven approach. Mainland China demonstrates this best. Here, banks and FinTechs are already making significant use of open APIs, even though there is no legal mandate to drive this, nor are there any standards in place.
The US also wants the market to drive open banking adoption, although a July report from the U.S. Treasury discusses how changes to the regulatory environment can also support FinTech innovation.
Will consumers embrace or avoid open banking?
Open banking will only succeed if it wins the trust of customers and makes them feel comfortable about sharing their data with third parties. But our research shows that, in most markets, consumers still need winning over.