Key Considerations for Open Finance - Executive Summary

Open finance is a financial innovation that enables customer-permissioned access to and use of financial data held by institutions to provide new and enhanced services and develop innovative business models. It expands on open banking by including a broader range of financial products, such as investments, insurance and pensions.

Open finance frameworks have the potential to enhance customer empowerment and experience, impact competition in the financial sector, spur data-driven innovation and improve financial inclusion. Yet open finance can also pose new or enhanced risks, especially as more data are exchanged between financial sector providers. Open finance can also impose new regulatory and supervisory demands, hinder competition if big players dominate and, in the absence of key supporting elements, risks leaving behind certain segments of the population.

A growing number of countries are considering, designing or implementing open finance frameworks. As the development and adoption of open finance becomes a central element of digital financial ecosystems in these countries, there is a unique opportunity to design open finance frameworks in a way that supports responsible financial inclusion and benefits all parties involved, especially those traditionally excluded and underserved.

With this in mind, the Bank for International Settlements, CGAP, the International Monetary Fund, the Office of the United Nations Secretary-General's Special Advocate for Financial Health and the World Bank jointly developed the Key considerations for open finance. The high-level considerations are intended for financial sector authorities implementing or seeking to implement or improve open finance frameworks.

The key considerations are structured around 10 key elements of an effective open finance framework (see the chart below). While these are presented as distinct elements, the design choices made under one element will impact other elements, and authorities should consider the interplay between different choices, as well as the possible trade-offs between different policy objectives. The table that follows the chart provides the key considerations for each key element.

Key elements of an open finance framework

Key considerations for open finance