A new Executive Order could help open the door for the portability of consumer financial data.
By Charles Weinstein and Deric Behar
Definitive regulation for open banking may be on the horizon in the US. On July 9, 2021, President Biden issued an Executive Order on Promoting Competition in the American Economy (the Order), which contains a section on banking and consumer finance that encourages the Consumer Financial Protection Bureau (CFPB) to issue rules on consumer financial data portability.
The Order’s request to the CFPB could help foster competition and reduce market concentration among banking institutions by simplifying personal data portability for consumers and making open banking functionality more readily available.
Imagine a world in which you could access your bank accounts, credit cards, mortgage, pensions, savings accounts and ISAs, brokerage account, home and car insurance, life insurance, and other financial products on one user interface or app, even if each of those products is held with a different provider. Then, imagine that the app could provide innovative financial management services across all of those products, such as automated switching to the best products, holistic investment advice and budgeting, and sweeping of excess cash into products yielding a better return than today’s current accounts. This world may be closer than you think, and it will likely have profound impacts for incumbent and new financial services business.