The Benefits of Open Banking to Consumers, Banks and FinTech Companies and recommendations for the RegTech design response.

The Benefits of Open Banking to Consumers, Banks, FinTech Companies and RegTech response.



FinTech, RegTech, Open Banking, SupTech, Grounded Theory



This paper presents a qualitative grounded theory investigation into the benefits of open banking for consumers, traditional banks and FinTech companies, with the study exploring the impact of open banking regulation on the banking industry. The development of regulation is being seen to occur globally, underpinning rapid transformation in banking and effectively supporting the rise of the FinTech phenomenon.

The general views held by traditional banks on open banking are explored together with the strategic responses available to them, as they seek compliance with recently issued data sharing regulation, and what this may mean for consumers and FinTech companies.

The role played by FinTech companies is also explored, including the possible benefits they derive and contribute to banks and consumers. The benefits to consumers are presented based on the findings and the literature, along with the benefits to banks and FinTech companies, based on the research.

The emergent theory provides a basis for recommendations designed to support banks to identify and extract the benefits to them as they navigate the transformative nature of the open banking regulation before them. These recommendations take the form of a two-part model integrated strategic review process by which banks can make better informed decisions, ensuring improved sustainability and systemic stability. Recommendations are also given for the consideration of FinTech companies.

The benefits presented by FinTech companies illustrate that relevant products are developed, delivering gratifying user experiences whilst also addressing issues concerning financial inclusion; an area banks historically have generally been unsuccessful at resolving.

As regulators grapple with the rapid innovation presented by open banking FinTech companies, significant findings emerged from the data which have been presented in this paper, along with a set of recommendations for the consideration of regulators seeking to develop an appropriate response to this innovation coming from the FinTech companies.